ITES in Bangladesh

Cover Design:
Md. Akram Hossain

System Analyst
Compose & Format:
Md. Mamun-Ur-Rashid Askari
Assistant Chief
Prepared:
Research Team
Bangladesh Tariff Commission
Assistant Chief
S.M. Sumaiya Zabeen
Research Officer
Kazi Monir Uddin
Research Officer
Published:
June, 2015
ISBN 978-984-33-9414-9
Problems and Prospects of IT and IT Enabled Services Outsourcing

in Bangladesh
Research Advisor
Dr. Md. Azizur Rahman
Chairman
(Secretary to Govt.)
Research Coordinator
Sheikh Abdul Mannan
Member
(Additional Secretary)
Research Team
Assistant Chief
S.M. Sumaiya Zabeen
Research Officer
Kazi Monir Uddin
Research Officer
Message
I am delighted to know that International Cooperation Division of Bangladesh Tariff
Commission has successfully completed the study on Problems and Prospects of IT
and IT Enabled Services Outsourcing in Bangladesh. It is really a very good job to
conduct a study on such a globally important issue.
This study is an outcome of a concerted effort of some fresh but talented officials of
Bangladesh Tariff Commission who are eager for exploring issues regarding
Bangladeshs interest in the international trade. With this research bent, they have tried to
examine some relevant issues in connection with IT and IT Enabled Services
Outsourcing by way of contributing insightful recommendations.
Presently, international trade in services is assuming greater importance with regard to
the countrys global business and commercial interests. Due to growing international
market, there is an urgent need for enhancing awareness and understanding among major
stakeholders which relates to the key issues of trade in services and development. I
believe this study will contribute a lot for the enhancement of awareness of the
stakeholders. The researchers, the policymakers as well as relevant service traders are
expected to be benefited from this study.
I also believe that this report will be of use for evidence-based decision making and for
the negotiation between Bangladesh and its global trade partners regarding IT related
services outsourcing and thus help to foster the economic growth of the country
materializing "Vision 2021'' of the present Government.
Special thanks to Mr. Sheikh Abdul Mannan, Member, Bangladesh Tariff Commission,
for coordinating the overall study programme.
My thanks are due for the research team leader Mr. Mamun-Ur-Rashid Askari, Assistant
Chief and members Mrs. Sumya Jabeen and Kazi Monir Uddin, Research Officer of
Bangladesh Tariff Commission for their splendid work and great enthusiasm to conduct
such an important study in right earnest.
I appreciate this noble initiative and thank all who were associated with this study.
Dr. Md. Azizur Rahman
(Secretary to Govt.)
Chairman
Govt. of the Peoples Republic of Bangladesh
ii
Foreward
Bangladesh Tariff Commission, along with its mandatory responsibilities, use to undertake
different research study at own initiative on trade related issues and put recommendations to
the government for further development of the concerned sector. In this connection
Commission has just completed a study titled Problems and Prospects of IT and IT
Enabled Services Outsourcing in Bangladesh.
During our recent past, service export has added a new dimension for diversifying our export
basket. But our service sector is not yet well organized and there is paucity of necessary data
and information for taking strategic decision. This study is a new kind of research work in the
arena of trade in services and discovered much about the problems and potential of IT
enabled services outsourcing in future. The rationale and objective of the study has been
stated in the introductory part.
A lot of work has been done including data collection, consultation with stakeholders at
different stages through conducting workshop, seminar and discussion for the development of
this study. Existing policy of the government has been reviewed and analyzed to observe its
commendability for the growth of the sector. In this report you will find an array of works,
representing some of the variety of BTCs recommendation on domestic trade policy
formulation.
We are living in an intensely competitive globalize world. Business in general and trade in
service in particular, has been becoming increasingly complex which is subjected to WTO
provisions on GATS and resultant emergence of ever changing international economic order.
Both GATS and domestic policy has been taken into consideration during policy
recommendation.
I would like to take the opportunity to express my heartfelt thanks and gratitude to the
Chairman of Bangladesh Tariff Commission, Dr. Md. Azizur Rahman, Research Advisor for
his all out cooperation and mentoring.
I would like to extend my thanks to research team consisting of Mr. Md. Mamun-Ur-Rashid
Askari, Assistant Chief, S.M. Sumaiya Zabeen and Kazi Monir Uddin, Research Officer of
Bangladesh Tariff Commission for undertaking much trouble to successfully complete this
study and all other stakeholders for their valuable contribution to enrich it .
I believe that, in spite of having some limitations, the information, analysis, findings and
recommendations of the study would be useful to the researchers for further research as well
as to the policymakers and other stakeholders for visualizing the prospects and shaping their
future action plan in order to materialize the VISION-2021 of our Government.
Sheikh Abdul Mannan

(Study Coordinator)
Member
(Additional Secretary)
iii
Preface
The World has witnessed phenomenal growth in the Information Technology (IT) over
the last few decades, and the countries which made a conscious decision to take
advantage of such growth, have made unprecedented progress. Examples are in
abundance; India, Sri Lanka, Thailand, Malaysia, the Philippines are sources of the
successful countries in our region.
The vision Digital Bangladesh encompasses the whole arena of a knowledge based
Digital Economy. It is an integral part of the governments Vision 2021which has a
promise to make a prosperous and equitable middle-income Bangladesh. Recent
recognition by International organizations like International Telecommunication Union
(ITU) for Bangladeshs innovative approaches towards introducing ICT-backed reforms
in public service delivery (ITU, 2014), the WSIS/ITU award for grassroots service
delivery kiosks (WSIS Award 2014). A recent report prepared by KPMG also echoes the
progress made during the period as it observes that the Digital Bangladesh initiative of
the government is helping setup infrastructure for enhanced connectivity, ICT based
citizen service delivery and ICT based education system. ICT may contribute 1% to GDP
If action oriented Policy is taken to boost this sector.
IT Enabled Services (ITES) is a sector of Information Technology (IT) Industry which
means production and delivery of services involving IT. Bangladesh is an emerging
destination for IT and ITES services outsourcing as recognized by different renowned
international bodies like Goldman Sachs, JP Morgan, Gartner.
In this context Bangladesh Tariff Commission conducted a comprehensive study on

Problems and Prospects of IT and IT Enabled Services Outsourcing in Bangladesh
keeping in mind the importance of its impact in the socio-economic development of
Bangladesh.
This study grew out of a team effort of some inquisitive officials of Bangladesh Tariff
Commission who are always eager to explore the unexplored issues regarding
international trade. In this report it was tried to explore the potential and difficulties faced
by this sector and relevant other issues in connection with IT and IT Enabled Services
Outsourcing.
We have prepared questionnaire for primary data collection at industry and individual
level, interviewed the experts and reviewed various published articles, journals to
conduct this study. In this study it has also been used data from Bangladesh Bank and
BASIS. We have made a comprehensive report in light with the analysis from those data
and information.
iv
It is indeed my great satisfaction that with the help of some tireless officials finally this
study report has been published.
I would like to convey my sincere gratitude to Dr. Md. Azizur Rahman (Secretary to
Govt.), Chairman, Bangladesh Tariff Commission for his kind observations on the initial
draft and subsequent advice and instructions towards completion of the report as the
advisor of the study. I also like to express my gratitude to Mr. Sheikh Abdul Mannan,
Member (Additional Secretary) of Bangladesh Tariff Commission for his valuable advice
and unconditional support as the Coordinator of the study.
My thanks are due for all members of the study team, especially my colleague S.M.
Sumaiya Zabeen (Research Officer) and Kazi Monir Uddin( Research Officer) for their
support and cooperation throughout the course of the work. Their innovative and creative
thinking was of immense help.
I must mention my special thanks to the data collectors for undertaking much trouble to
collect data for conducting this study.
Finally, I express my heartiest gratitude to the stakeholders who besides their cooperation
were a constant source of inspiration to me.
Md. Mamu-Ur-Rashid Askari

(Principal Researcher)
Assistant Chief, Bangladesh Tariff Commission
Acknowledgement
We take this opportunity to express our profound gratitude and deep regards to all whose
support, guidance, monitoring, encouragement and cooperation throughout the course of this
study make this a successfully accomplished one. We would like to express our deepest
appreciation to all those who provided us the support to complete this report.
We feel deeply honored in expressing our sincere thanks to all those who represents office of
different stakeholders in our workshops and seminars and contributed to enrich our report.
We express our gratitude to the representatives from Bangladesh Bank, Ministry of
Commerce, Ministry of Industry, National Board of Revenue, Bangladesh Bureau of
Statistics, Export Promotion Bureau, Bangladesh Computer Council, Center for Policy
Dialogue, Bangladesh High Tech Park Authority, Small & Medium Enterprise Foundation,
Dhaka Chamber of Commerce and Industries, Metropolitan Chamber of Commerce and
Industry, Federation of Bangladesh Chambers of Commerce and Industry, Bangladesh
Association of Software and Information Services whose valuable insights helped to enrich
our report. This report would not have been possible without the collective, coordinated
cooperation from their part.
We would like to convey heartiest thanks to the executives of IT and ITeS enterprises and
freelancers business chambers & associations and government officials who gave their
invaluable time to speak to us and shared their experience and perspective, including those
who appear in this report as case studies. We also take this opportunity to express a deep
sense of gratitude to our colleagues Dr. Md. Neyamat Ullah Bhuiyan (Joint Chief), Mohd.
Khalid Abu Naser (Joint Chief), Mr. Md. Abu Musa (Joint Chief), Mr. Md. Iqbal Hussain
(Secretary), Mr. Md.Abdus Sattar (Deputy Chief), Fouzia Khan (Deputy Chief), Mr. Md.
Moshiul Alam (Deputy Chief), Mr. Md. Akram Hossain (System Analyst), Mr. Md. Raihan
Ubaidullah (Assistant Chief), Mr. Md. Mayen Uddin Molla (Assistant Chief), Mr. Mirza
Abul Fazal Md. Tawhidur Rahman (Research Officer), Mr. Mohinul Karim Khondker
(Research Officer), Mr. H.M. Shariful Islam (Public Relation and Publication Officer) of
Bangladesh Tariff Commission whose cordial support helped us in completing this task
through various stages.
Dr Md Azizur Rahman, Chairman, Bangladesh Tariff Commission deserves our special
thanks and gratitude who took the initiative to conduct this basic research and always
encouraged us extending all out cooperation.
We would like to extend our thanks and gratitude to Sheikh Abdul Mannan, Member,
Bangladesh Tariff Commission for continuous guidance and encouragement to accomplish
this task as the coordinator of the study.
We would also like to thank Ms.Tania Sultana, Ms. Razia Sultana, Mr. Abdullah al Roman
and Mr. Zahiruddin Firoz for their active participation and cooperation as data collector of
the study and Fatema Rukshana( Personal Assistant), Suborna Das( Steno-grapher CumComputer operator), Syeda Afria Sultana( Computer Typist), Mahmuda Parvin (LDA Cum
Computer Typist) of Bangladesh Tariff Commission for data entry and processing.
Study Team
vi
Table of Contents
Foreword................................................................................................................................................................. ii
Acknowledgement ................................................................................................................................................. vi
Chapter One .......................................................................................................................................................... 1
Introduction ............................................................................................................................................................ 1
Background ......................................................................................................................................................... 1
Objectives of the Study ....................................................................................................................................... 2
Methodology....................................................................................................................................................... 2
Limitation of the Study ....................................................................................................................................... 3
Chapter Two ......................................................................................................................................................... 4
Review of Literature ............................................................................................................................................... 4
Outsourcing at a Glance...................................................................................................................................... 4
Global Trend of IT outsourcing industry ............................................................................................................ 5
Status of Bangladesh .......................................................................................................................................... 5
Chapter Three ....................................................................................................................................................... 9
Institutional and Regulatory Framework ................................................................................................................ 9
GATS Perspective .............................................................................................................................................. 9
Regulatory Bodies in Bangladesh ....................................................................................................................... 9
Government Initiatives, Policies, Acts and Programs ....................................................................................... 10
Strategic Priorities of Digital Bangladesh..................................................................................................... 10
ICT Act 2006 as well as ICT Act 2013(Amendment) .................................................................................. 12
National ICT Policy 2009 ............................................................................................................................. 13
Sixth Five Year Plan (SFYP-2010-2015) ..................................................................................................... 13
Perspective Plan 2010-2021 ......................................................................................................................... 14
Foreign Exchange Rules and Regulations of IT/IT Based outsourcing in Bangladesh ................................ 15
Tax Structure ................................................................................................................................................ 15
Outsourcing and Freelancing ................................................................................................................................ 18
Chapter Five........................................................................................................................................................ 23
Findings ................................................................................................................................................................ 23
Present Status and Trend of IT& ITES Industry in Bangladesh ....................................................................... 23
Bangladesh Software and ITES Industry ...................................................................................................... 23
Global Trade of Bangladesh ......................................................................................................................... 24
Business Specialization of BASIS Member Companies ................................................................................... 30
IT related Associations in Bangladesh .............................................................................................................. 31
Status of ITES Training in Bangladesh ........................................................................................................ 37
Challenges faced by Bangladesh .................................................................................................................. 38
Challenges at Firm Level .............................................................................................................................. 38
Challenges for Freelancing ........................................................................................................................... 43
SWOT Analysis of the IT and ITES Services Outsourcing .................................................................................. 44
Chapter Six.......................................................................................................................................................... 45
Recommendations ................................................................................................................................................ 45
Concluding Remarks ............................................................................................................................................ 49
References ............................................................................................................................................................ 71
vii
List of Tables
Table1:Tax structure in Bangladesh
14
Table2:Total Export of IT/ITES Services.....22
Table3:Country wise Export of IT/ITES Services.......23
Table 4:Country Wise Payments Made by Bangladesh for Computer Consultancy Services.25
Table5:Country Wise Payments Made by Bangladesh for Computer Data Processing Services.25
Table6: Country Wise Payments Made by Bangladesh for Computer Software...26
Table7: Information Technology Workforce in Bangladesh...30
Table 8 : Training Programs arranged and attended by 18 enterprises.34
Table 9: Likert scale analysis ....35
Table 10: Source of initial investment funds by type of enterprise (18 Enterprises)38
Table 11: Obstacles Faced by Freelancers.39
List of Figures
Figure1: Comparison of Tax Structure in Asia.15
Figure 2: Bangladesh Software and ITES Industry...21
Figure 3: Recent Trends in Export of Computer Related Services in Bangladesh....24
Figure4: Recent Trends in Import of Computer Related Services in Bangladesh26
Figure 5: Business Specialization of BASIS Member Companies.......27
Figure 6: Countries as Export Destination by 14 Enterprizes of Bangladesh in 201429
Figure 7: Number of contacts made by 18 Enterprises over the last 5 years.30
Figure 8: Results of HSC Examination 2005-2014.......................................31
Figure 9: No. of Students Passed HSC Exam with GPA of 4.00 or more in a Scale of 5.0031
Figure 10: Source of Initial Investment.........................................................................37
Figure 11: Reasons for Entrepreneurs for Choosing this Sector for Investment.38
List of Boxes
Box 1: Digital Bangladesh Policies and Regulatory Framework15
Box 2: Summary of ICT Act, 2006...15
Box3: Outsourcing Marketplaces..17
Box4: Snapshot of the freelancing marketplaces..18
Box5: Available projects types..18
Box 6: PAYPAL at a glance......20
Box7: Case Study 1............32
Box 8: Case Study 2 ..........32
Box9:SWOTAnalysis40
viii
Abbreviations
7FYP
7th Five Year Plan
A2I
Access to Information Program
ADs
Authorized Dealers
BANBEIS Bangladesh Bureau of Education Information and Statistics
BASIS
Bangladesh Association of Software and Information Services
BB
Bangladesh Bank
BBS
Bangladesh Bureau of Statistics
BCC
Bangladesh Computer Council
BCS
Bangladesh Computer Samity
BKITCE Bangladesh- Korea ICT Training Center for Education
BPC
Business Promotion Council
BPM
Business Process Management
BPO
Business Process Outsourcing
BWIT
Bangladesh Women in Technology
CPC
Central Product Classification
EPB
Export Promotion Bureau
ERQ
Exporters Retention Quota
FEP
Foreign Exchange Policy
GATS
General Agreement on Trade in Services
GDP
Gross Domestic Product
GPA
Grade Point Average
HSC
Higher Secondary School Certificate
ICT
Information and Communication Technology
IMF
International Monetary Fund
IT
Information Technology
ITES
IT Enabled Services
ITU
International Telecommunication Union
KOICA Korea International Cooperation Agency
KPM
Knowledge Process Management
KPO
Knowledge Process Outsourcing
LPO
Legal Process Outsourcing
MoI
Ministry of Information
MoPTIT Telecommunications and Information Technology
MoSICT Ministry of Science and Information & Communication Technology
NACTAR National Academy for Computer Training And Research
NBR
National Board of Revenue
OPGSPs Online Payment Gateway Service Providers
PMO
Prime Ministers Office
SFYP
Sixth Five Year Plan
SMEF
Small and Medium Enterprise Foundation
SSC
Secondary School Certificate
USA
United States of America
VAT
Value Added Tax
WSIS
World Summit on Information Society
ix
Executive Summary
1.
IT and IT Enabled Services Outsourcing in Bangladesh is a comparatively new
business sector in Bangladesh. IT Enabled Services (ITES) is a sector of Information
Technology (IT) Industry. ITES means production and delivery of services involving IT. In
broad category, Major IT Enabled Services include Web, Mobile & Software Development,
IT & Networking, Data Science & Analytics, Engineering & Architecture, Design &
Creative, Writing, Translation, Legal, Admin Support, Customer Services, Sales &
Marketing, Accounting & Consulting etc. The term "outsourcing" dates back to at least 1981.
Outsourcing means a practice to reduce costs by transferring portions of work to outside
suppliers. Sometimes outsourcing involves transferring employees and assets from one firm
to another. .In Bangladesh, Graphics design, Website development, Product development,
Mobile application development, Software development, Back office administrative work,
2D/3D animation, Desktop publications , Call centers are prominent IT/ITES services
outsourced from Bangladesh to many foreign countries. The term "outsourcing" dates back to
at least 1981. Outsourcing means a practice to reduce costs by transferring portions of work
to outside suppliers. Sometimes outsourcing involves transferring employees and assets from
one firm to another. The core strength of Bangladesh in outsourcing these services is the
people or workforce. The educated, trainable and young workforce creates Bangladesh as
lucrative places through acquiring the necessary skill sets to compete in the global scenario.
On the other hand the government of Bangladesh has declared the ICT sector as thrust
sector. In this context, Bangladesh Tariff Commission has taken the study on Problems and
Prospects of IT and IT Enabled Services Outsourcing in Bangladesh.
2.
The objectives of the study was to evaluate present status and trends, to analyze
related Acts, Rules and Policies, to explore potentials and export opportunities, to assess
possibility of employment generation, to identify constraints and opportunities and to prepare
policy recommendations. The Study started with review of existing literature. Primary data
was collected from 26 IT/ITES enterprises through structured questionnaire which was
finalized by a workshop. Besides, Primary data was also collected from 15 freelancers by
another questionnaire. (See annex 1 for details of two questionnaires). Interviews of 5
freelancers and 5 IT/ITES entrepreneurs were taken. Group Discussion meeting were
constituted with BASIS, Bangladesh Bank, Bureau of Statistics and Dhaka Chamber of
Commerce and Industries. Secondary Data was taken from published Articles, Journals,
Legal & Policy Issues, Different sources database of BASIS, BBS, NBR, EPB etc Tabular,
Graphical and Statistical analyses were made in order to reach the findings and make
recommendations. The report is finalized by discussing the primary findings of the study in a
seminar. However, the study has few limitation including unavailability of complete national
statistics, limited Budget, time Constraint, unwillingness of providing financial statement by
the enterprises.
3.
As an emerging Information Technology (IT) and Information Technology Enabled
Services (ITES) outsourcing destination, Bangladesh endorsed by international renowned
bodies like Goldman Sachs, JP Morgan, Gartner etc. The main reason is that Bangladesh
offers lower cost than that of India and the Philippines an additional advantage, is that a pool
of 7 million human resources who are able to speak in English as a second language.
According to Md. Mahfuzul Quader (2013) the major reasons to choose Bangladesh as a
x
prime exporter of outsourcing of IT and ITES are low labor cost and commercial rent. Most
of the IT firms are based in the capital city Dhaka where rental cost is relatively higher than
other parts of the country. But still the commercial rental in business zone, like Motijheel,
Gulshan, Banani etc., is cheaper than that of Delhi by 20% and Manila by 40% (Crushman &
Wakefield, 2011). As per KPMG Pay Scale Analysis report (2012), the entry level IT
personnel average salary is over 50% cheaper than that of other Asia-Pacific countries like
India, the Philippines, Malaysia, Sri Lanka, Thailand and Vietnam etc. Moreover, the salary
is even cheaper by 75% to 80% than that of Eastern European countries like Poland,
Hungary, Russia, Ukraine, Czech, Romania and Latin American countries like Brazil, Chile,
Mexico etc. Most importantly, the average inflation rate in Bangladesh has been ranging from
6% to 8% for the last decade which is quite steady in nature. According to this report, there
are still areas need proper considerations. Threats like negative perception about Bangladesh,
inadequate/ absence of holistic approach towards promoting the IT/ITeS industry including
investment climate, taxation, remittances, legal framework and flexible working hours,
challenging economic conditions need to be properly addressed.
4.
The responsibilities for ICT activities are fragmented across three ministries: Ministry
of Post, Telecommunications and Information Technology (MoPTIT), Ministry of Science
and Information & Communication Technology (MoSICT) and Ministry of Information
(MoI). MoPTIT is responsible for telecommunication infrastructure; MoSICT through its ICT
Division (ICTD) is responsible for e-Government and IT/ITES business promotion while
MoI is responsible for Broadcasting. ICTD conducts its activities through its 3 organizations:
Bangladesh Computer Council (BCC), Office of the Controller of the Certifying Authority
and High Tech Park Authority. The countrys lone ICT Incubator is operating at Karwan
Bazar and the 12 storied building Janata Tower is now being renovated to establish the
IT/ITES Technology Park in Karwan Bazar. The ICT Division through High Tech Park
Authority is in the process of appointing Park Operator for the Kaliakoir High Tech Park and
has also initiated the process of acquiring lands outside Dhaka for the establishment of
IT/ITES Technology Parks. Various e-governance implementations are now being
implemented by Access to Information Program (A2I) under Prime Ministers Office and
Bangladesh Computer Council (BCC) under ICT Division. Bangladesh Computer Council
(BCC) is a statutory body under the Ministry of Information & Communication Technology,
Government of Bangladesh for encouraging and providing support for ICT related
activities in Bangladesh. It is established by Act No IX of 1990 passed by the Parliament.
Though lack of coordination among various agencies in implementation of ICT project is one
of the challenges but the situation is improving. The key Acts/Policy in these sectors includes
ICT Act 2006 as well as ICT Act 2013(Amendment). National ICT Policy 2015, Sixth Five
Year Plan (SFYP-2010-2015), Perspective Plan 2010-2021, Foreign exchange rules- policies
and tax polices of Ministry of Finance.
5.
According to BASIS survey, there are over 800 registered software and ITES (IT
Enabled Service) companies in Bangladesh. The total industry size is estimated to be around
Tk. 1,800 crore (US$ 250 million). Approximately 30,000 professionals, majority IT and
other graduates, are employed in the industry. There is no national level data available in
these services. Yet, Bangladesh Bank processes some data generated through banking
channel. Bangladesh Bank processes data as per International Monetary Fund (IMF) 6 th
Manual of Balance of Payments. A discussion meeting was constituted at Statistics division
of Bangladesh Bank where it was agreed that BB statistics may be understated if the
payments are not made through proper banking channel, especially through International
Credit Cards. Yet since most of the enterprises uses banking channels, it could be safely
xi
argued that receipts earned from exports by enterprises are covered service BB statistics in
most part. Under Heading of Computer Services, total receipt of foreign currency (equivalent
to Bangladeshs expert) was US$ 125.54 Million in FY 2013-14 out of which computer
software was US$ 69.41 Million while Computer data processing and computer consultancy
services were exported by US$ 47.56 million and US$ 8.57 million respectively. Bangladesh
has maintained an excellent growth rate in this sector.
6.
Besides, firm or enterprise level, IT & ITES services are outsourced by freelancers. It
is difficult to find the exact number. Odesk recently merged with Elance is probably the
largest freelancing online market place popular to Bangladeshi freelancers. It could be
expected that all freelancers in Bangladesh are registered user of Odesk. The hypothesis is
logical, since getting outsourcing job is competitive one and one freelancer has to register
with many online market places. In June 2014, total number of registered freelancers in Odex
was about 1.47 million from all countries, out of which 41 thousand were registered from
Bangladesh. Among all of these 41 thousand freelancers have not taken freelancing as a
profession.
7.
Primary data Analysis on 26 Enterprises reveals that IT & ITES services sectors in
Bangladesh are facing many problems. Electricity Load shedding ranked as topmost obstacle.
As high electricity load shedding force enterprises to use alternative power supply like
generators which increases costs. Foreign Exchange Policy (FEP) is another major problem.
FEP hinders business when it is required to make payment for import of software, books etc.
Enterprises also worry about the cost of internet. Many entrepreneurs feel that the cost of
internet is much higher than other competitor countries. Although Govt. is gradually reducing
the cost of internet it is still a problem for the end users especially at the district level.
Different districts of Bangladesh are not getting access to the internet at the same price as
Dhaka. Lack of Promotion of Country Image or Branding is one of the major problems that
many entrepreneurs feel to be fixed out. It is important to note that the slogan of Digital
Bangladesh has promoted the country image in IT sector by a great deal. Now some more
Branding Campaign needed. Access to finance is another significant problem. As a service
sector, the output is not as visible as goods sector which is a real problem. Besides,
Enterprises also lack proper financial reporting which further discourages bankers to provide
loan. Lack of Skilled Manpower is another problem especially for services that require
advanced skills. Many enterprises think that they could not make expansion for lack of
capital. One of the Key challenges of the IT/ITES sectors in Bangladesh is the fact that
employee turnover is high especially in high skilled sectors like to software development.
There is also lack of proper infrastructure. Although government is making high-tech park
and other facilities, enterprises needs to get proper incentives and support socio economic
environment around such parks so that experts may lead sound and healthy livelihood around
the park. Lack of Capital as initial investment, It is needless to mention that the IT is a sector
for entrepreneurship by predominantly IT professionals, not by traditional millionaires. So
initial investment, IT professionals lack capital needed and in the absence of knowledge by
Banks, the problem is vital. Business related rules and regulations also hinder to some extent
the business, licensing procedure, import procedure needs to be much easier. However, other
obstacles listed in the table above are minor. The IT & ITES enterprises so far have
progressed by self entrepreneurship. Data on 18 enterprises shows that 77.62% of total initial
investment made by 18 firms came from self financing while only 2.53% came from banks.
Among these 18 enterprises, only one could get loans from Banks.
xii
8.
Information on 15 freelancers showed that the cost of obtaining internet bandwidth,
smooth transaction of payments, Lack of proper infrastructure, Foreign Exchange Policy,
Electricity load shedding, Internet bandwidth (speed), Business related rules and regulations
of government, Access to Finance are founded as key problems. As the government is
working with internet bandwidth, the major concern for freelancers is the smooth transaction
of payments, that is the delay or hassles traditional banking system makes in receipt of
payment which discourages both market places and freelancers. Introduction of PayPal is the
key solution as the freelancers thought.
9.
In this study it is tried to explore the potential and difficulties faced by this sector and
make some recommendations accordingly. It has been recommended to ensure the cost of
internet at reduced price and available to all districts at the user level especially for the real
online professionals. Another recommendation is to include more hands on ICT related topics
like success stories of the freelancers in the childrens books to realize the importance of IT
and ITES. To get benefit for Bangladesh from outsourcing of IT/ITES services in large scale,
it is necessary to bring upcoming young educated human resources into the coverage area of
outsourcing. In this context it has been recommended to include hands on exercise at the
secondary and higher secondary syllabus with a view to providing some practical knowledge
on Outsourcing. Regarding Hi-Tech Park it is recommended to address the absence of socio
economic infrastructure of High-Tec Park and. It has also been recommended eliminating 4%
VAT on e-commerce which is really an obstacle to the growth of e-commerce as well as
other IT business. Another important recommendation is to build awareness among the
stakeholders regarding the internationally recognized terminologies of ITES like BPO, BPM,
KPO, KPM etc. Online money transfer appeared to be the most significant problem for the
freelancers in Bangladesh. PayPal, now available in 56 countries might be the solution for
smoother online transaction and hence Govt. may take steps to attract Pay Pal in Bangladesh.
For the identification of the real freelancers among different Banks Officials, they should be
trained about the basic concept of freelancing, outsourcing, marketplaces, online payment
gateways, blogging, affiliate channels to identify the real freelancers to ensure a smooth
transaction. BASIS, BCS, BCC or similar concerns including Government may organize such
awareness building programs. In order to provide incentive to the IT/ITES enterprises and
encourage new entrepreneurship, 9% VAT on house rent for IT/ITES enterprises might be
rebated.
10.
In addition to that, there are some other recommendations regarding advanced science
and technology institute, domain knowledge building, investment in research and
development, knowledge management, friendly govt. policies, professional training, highly
qualified talent pool of technical graduates and freelancers, recognition for the freelancers,
image building and branding with a view to help solve those problems as identified in this
study. The future of the IT and ITES outsourcing industry is very bright provided it
overcomes the challenges, weaknesses and threats cited in this study. To make all these plans,
policies and initiatives to be a successful, government needs a collaborative action plan to
prioritize the impediments faced by this sector as identified in this study and various others
study and undertake concrete follow up actions.
xiii
Problems and Prospects of IT and IT Enabled Services Outsourcing

in Bangladesh
Chapter One
Introduction
Background
11.
The term "outsourcing" dates back to at least 1981. Outsourcing means a practice to
reduce costs by transferring portions of work to outside suppliers. Sometimes outsourcing
involves transferring employees and assets from one firm to another. IT Enabled Services
(ITES) is a sector of Information Technology (IT) Industry. ITES means production and
delivery of services involving IT. In broad category, Major IT Enabled Services include Web,
Mobile & Software Development, IT & Networking, Data Science & Analytics, Engineering
& Architecture, Design & Creative, Writing, Translation, Legal, Admin Support, Customer
Services, Sales & Marketing, and Accounting & Consulting etc. Graphics design, Website
development, Product development, Mobile application development, Software development,
Back office administrative work, 2D/3D animation, Desktop publications, Call centers are
prominent IT/ITES services have been outsourced from Bangladesh to many foreign
countries.
12.
IT and IT Enabled Services Outsourcing in Bangladesh is a comparatively new
business sectors in Bangladesh. A rapid growth in this sector has been witnessed over the last
few years. This happens due to the result of the steady growth of global IT outsourcing
industry. The global economic crisis has led to shrinking IT budgets for corporate industries.
Though there has been a continual growth in demand for global sourcing of IT services, with
cost optimization being the primary driver for such urge. The increasing cost pressures, with
new service delivery paradigms like cloud computing and multiple sourcing, is set to
transform the outsourcing industry globally. In this circumstance the ICT sector, as a whole,
shows a gradual growth in Bangladesh where the hardware segment dominates the market
share (65 per cent) while the relatively late entrant, software segments command about 15 per
cent of the total market. The ITES segment (15 per cent) and Internet and Network Services
(5 percent) make up the remaining part of the market. According to Bangladesh Bank
sources, export earnings from Software and ITES was USD 27.01 million in 2005-06,
registering a growth of 113 per cent from the previous year. Software companies in
Bangladesh concentrate on the IT/ITES needs of the local leading sectors like Garments,
Banks and Government. At the same time, leveraging the global nature of the IT business the
local entrepreneurs are always looking for international opportunities. In this circumstances
Bangladesh now has become one of the most potential outsourcing destinations in the world.
1|7 1
13.
The core strength of Bangladesh in outsourcing these services is the people or
workforce. The educated, trainable and young workforce creates Bangladesh as lucrative
places through acquiring the necessary skill sets to compete in the global scenario. On the
other hand the government of Bangladesh has declared the ICT sector as thrust sector. The
creation of a separate Ministry for ICT (Ministry of Science and Information &
Communication Technology), formulating favorable laws and initiating government IT
projects are encouraging steps for the local/international investors in the Bangladesh ICT
industry. In addition to the policy development, the government is keeping close interactions
with various industry associations like BASIS, BCS, BCC and ISPAB are some of the apex
bodies working for the improvement of the ICT industry in Bangladesh. No doubt all these
initiatives in together generate and develop a more friendly environment to explore the
existing potential of IT and IT Enabled Services Outsourcing in Bangladesh.
14.
In this context Bangladesh Tariff Commission has decided to conduct a
comprehensive study on Problems and Prospects of IT and IT Enabled Services Outsourcing
in Bangladesh keeping in mind the importance of its impact in the socio-economic
development of Bangladesh.
Objectives of the Study
15.
Considering the existing scenario described above, the present study is concentrated
on the following objectives:
To evaluate present status and trends
To analysis related Acts, Rules and Policies
To explore potentials and export opportunities
To assess possibility of employment generation
To identify constraints and opportunities
To prepare policy recommendations
Methodology
16.
The Study started with review of existing literature. Primary data was collected from
25 IT/ITES firms through structured questionnaire which was finalized by a workshop.
Besides, Primary data was collected from 15 freelancers by another questionnaire. (See annex
1 and annex 2 for details of two questionnaires). Interviews of 5 freelancers and 5 IT/ITES
entrepreneurs were taken. Discussion meetings were constituted with BASIS, Bangladesh
Bank, Bureau of Statistics, Dhaka Chamber of Commerce and Industries and some other
firms. Secondary Data were taken from published articles, journals, legal & policy related
papers, different sources database of BASIS, BBS, NBR, EPB etc. Tabular and Graphical
analyses were made in order to reach the findings and make recommendations accordingly.
2|7 1
Limitation of the Study

17.
During the whole period of the study the researchers had to face a few challenges. The
most important limitation is the unavailability of complete national statistics. It has been found
that different statistics are available from different sources. There is also dissimilarity in those
statistics due to the use of different methodology of collecting data. Needless to say that there is
no single source for collecting those statistics. Several attempts were made to collect those data
from different sources but all attempts were in vain. To overcome this limitation, different
sources are used. Therefore, there may be some discrepancy in those statistics. Another important
limitation was limited budget for the study. Due to budget constraint the study team had to recruit
only three data collectors. It was not possible for them to cover all the districts of Bangladesh
for collecting data. Within three months the team had to complete this study which was
another limitation. For this time constraint the team had to reduce the sample size of data
collection. Reluctance of providing financial statement from the entrepreneurs was also a
limitation.
3|7 1
Chapter Two
Review of Literature
18.
There are different types of studies, reports and analysis about IT and ITES services
as well as outsourcing in Bangladesh. These studies with different agenda and perspective
revealed outsourcing as a potential area for Bangladesh to explore. These studies cover issues
like global trend of outsourcing, position of Bangladesh in this market, existing potential and
threats for Bangladesh etc. These papers basically provide with a strong background to
understand this sector for an in depth analysis for policy recommendation to government.
Outsourcing at a Glance
19.
The back office business service evolved over the passage of time which is deeply
integrated with three basic trends: off shoring, outsourcing and automation. Outsourcing
refers to back office operation performed by a third country under a contractual arrangement.
Geographical difference and distance is minimized through the development of technology
and communication. There are different terminological explanations of outsourcing.
Outsourcing can be described as the contracting out of the companys major functions and
activities to an external service or goods provider.1 Besides outsourcing can also be defined
as transferring various operations to outside suppliers rather than completing them
internally. Outsourcing can be done in both domestic and foreign markets and always
involves a third party.2 When it comes to the term of IT and ITES outsourcing it basically
indicates to outsourcing of processes that can be enabled with information technology and
covers diverse areas like finance, Human Resources, administration, health care,
telecommunication, manufacturing etc. With the support of technology and manpower, these
services are provided from e-enabled locations. This radically reduces costs and improves
service standards. According to Gartner IT outsourcing (as a part of an outsourcing
definition) is the use of external service providers to effectively deliver IT-enabled business
process, application service and infrastructure solutions for business outcomes. Outsourcing,
also includes utility services, software as a service and cloud-enabled outsourcing, helps
clients to develop the right sourcing strategies and vision, select the right IT service
providers, structure the best possible contracts, and govern deals for sustainable win-win
relationships with external providers. Outsourcing can enable enterprises to reduce costs,
accelerate time to market, and take advantage of external expertise, assets and/or intellectual
property. 3
1
Pankaj M.Madhani, Global Hub: IT and ITES Outsourcing,

http://www.researchgate.net/publication/228234326_Global_Hub_IT_and_ITES_Outsourcing
2
ICT Sector Study Bangladesh: Bridging the Gap between Dutch and Bangladeshi ICT Sector available at
http://www.basis.org.bd/resource/ICT%20Sector%20Study%20Bangladesh.pdf
3 Gartner IT Glossary at http://www.gartner.com/it-glossary/it-outsourcing
4|7 1
Global Trend of IT outsourcing industry

20.
Global IT outsourcing industry shows a steady and sharp growth in the last decade.
The mostly mentioned reason in existing and available literature is the technological
development, cost optimization as well as strong base of young people. As mentioned by the
International Trade Center the current global economic crisis has led to shrinking IT budgets
for corporate, but there has been a continual growth in demand for global sourcing of IT
services, with cost optimization being the primary driver for off shoring services. The
increasing cost pressures, with new service delivery paradigms like cloud computing and
multiple sourcing, is set to transform the outsourcing industry globally.4 The similar growth
trend is found in the report of Gartner. According to Gartner the IT outsourcing market is
forecast to grow by 5.2% (5.5% in constant currency) in 2014. We forecast spending to grow
by a 5.9% compound annual growth rate from 2013 through 2018. 5
Status of Bangladesh
Different types of outsourcing services have been provided worldwide in IT and IT

Enabled services category. According to Business Promotion Council, among those
different categories Bangladesh exports and provides the services mentioned below:
Multimedia products development
Digital Brochure & Digital Magazine

2D/3D Presentation and Animation
Audio and Video Editing
Cartoon Animation
Customized Database Application
Enterprise Resource Solutions
Legacy Application development
Banking and Financial Solutions
Device Driver development
Smart Card Solutions
Web Programming
Web Content Writing
Web update & related services
Pre-press Graphics Design
CAD/GIS Services
Architectural Design
Data Entry services
Medical transcription processing (All types)
6
Bank Officer Services or Call centre services
21.
Bangladesh has the prospect and potential of becoming a leading outsourcing
destination due to cost competitiveness and scope for capacity development. There are
4
Bangladesh
Beckons-An
Emerging
Destination
For
IT/ITeS
Outsourcing;2012;
http://www.intracen.org/news/New-report-Bangladesh-beckons---an-emerging-destination-for-ITITeSoutsourcing/
5 Forecast Analysis: IT Outsourcing, Worldwide, 1Q14 Update at
https://www.gartner.com/doc/2707918/forecast-analysis-it-outsourcing-worldwide
6
Why Bangladesh , Business Promotion Council at http://bpc.org.bd/ibpc_whybd.php
at:
5|7 1
different reports and studies regarding the status of Bangladesh in the existing outsourcing
market where IT and ITES is considered as a potential sector for Bangladesh to be explored.
22.
In Crain's New York Business, a front page article titled "Outsourcing Moves to
Bangladesh" discusses how Bangladesh is a rising star in the international economy with
industrial analysts from Goldman Sachs to Cisco Systems predicting that it has high potential
to follow in the successful economic steps of the giant next door- India. According to this
article as wages and other costs in India continue to escalate at rates as high as 15% a year,
more New York companies are going next door to Bangladesh.7 The reasons behind it were
identified as: relatively high number of educated, skilled workers who speak English, work
long hours and can design a lucrative web page.
23.
Over recent years, Bangladesh has made major pace in laying the groundwork for a
successful and potential outsourcing market. The IT services industry within Bangladesh has
been growing serving international clients and domestic clients in the banking and telecom
sectors. The industry now employs over 20,000 people, and is exporting services to
European, North American and East Asian clients. Bangladeshs emerging outsourcing
players already have strong credentials.8 For outsourcing purpose oDesk and eLance
remains as the mostly used work location in Bangladesh. According to the KPMG report
(2012):
Bangladesh offers a group of young, skilled and English speaking human resources at a
comparatively lower cost. Considering the existing global outsourcing market Bangladesh is a
lucrative option to be chosen as it offers a group of human resources at costs almost 40%
lower than established destinations like India and Philippines.
Government has demonstrated and expressed a determination to promote IT services industry

in the country. Different initiatives like cheaper bandwidth and alternate international cables,
establishing Technology parks and providing tax holidays for export oriented industries- are
taken to encourage this sector.
The Digital Bangladesh initiative of the government is helping setup infrastructure for
enhanced connectivity, ICT based citizen service delivery and ICT based education system.
Different prominent global players like Samsung, AMD, VizRT, WorldBridge Global starting
to operate in Bangladesh which create opportunity for the young human resources to be
familiar with the international standard.
24.
As an emerging Information Technology (IT) and Information Technology Enabled
Services (ITES) outsourcing destination, Bangladesh endorsed by international renowned
bodies like Goldman Sachs, JP Morgan, Gartner etc. The main reason is that Bangladesh
7
Samantha Marshall ,Outsourcing moves to Bangladesh ;December 16, 2007 available at

http://www.crainsnewyork.com/article/20071216/SUB/312160001/outsourcing-moves-to-bangladesh
Bangladesh Beckons - An Emerging Destination For IT/ITeS Outsourcing( 2012); at:

http://www.intracen.org/news/New-report-Bangladesh-beckons---an-emerging-destinationfor-ITITeS-outsourcing/
8
6|7 1
offers lower cost than that of India and the Philippines an additional advantage, is that a pool
of 7 million human resources who are able to speak in English as a second language.
According to Md. Mahfuzul Quader (2013) the major reasons to choose Bangladesh as a
prime exporter of outsourcing of IT and ITES are low labor cost and commercial rent.
Bangladesh has a competitive advantage compared to some of the leading outsourcing
countries like the Philippines, India, Brazil, China, Russia etc. As per KPMG Pay Scale
Analysis report, the entry level IT personnel average salary is over 50% cheaper than that of
other Asia-Pacific countries like India, the Philippines, Malaysia, Sri Lanka, Thailand and
Vietnam etc. Moreover, the salary is even cheaper by 75% to 80% than that of Eastern
European countries like Poland, Hungary, Russia, Ukraine, Czech, Romania and Latin
American countries like Brazil, Chile, Mexico etc. Most importantly, the average inflation
rate in Bangladesh has been ranging from 6% to 8% for the last decade which is quite steady
in nature9. Besides the infrastructure cost which is an important factor prior to setting up
any business also gives Bangladesh an advantage. Most of the IT firms are based in the
capital city Dhaka where rental cost is relatively higher than other parts of the country. But
still the commercial rental in business zone, like Motijheel, Gulshan, Banani etc., is cheaper
than that of Delhi by 20% and Manila by 40% (Source: Crushman & Wakefield Research,
2011). It is reported that some IT firms already decentralized their setup at surroundings of
Dhaka city to optimize their operation cost even more.10
25.
The Business Promotion Council (BPC), Bangladesh depicts the situation in a little bit
different way. According to BPC Bangladesh is on the course to prove itself in the growing
IT sectors all over the world. A large part of IT graduates prove them in different
multinational workplace. Over 10,000 IT professional from Bangladesh are working
successfully in various IT companies in USA including Microsoft, Intel, IBM, Sun, Oracle,
Texas Instruments, Cisco, Nortel and Lucent-to name a few. A large part of these IT
graduates also possess global IT vendor certifications (e.g. from Microsoft, Cisco Oracle,
Sun) on top of their academic degrees. In this situation the large pool of younger people with
productive age group between 16 to 35 years create demographic dividend for Bangladesh.
Because:
These people traditionally have higher mathematical aptitude and superior logical &
analytical abilities.11
This group of people has opportunities to develop expertise and knowledge in IT related field
through universities, colleges, institutes and training centers providing IT related education.
Different educational institutions in Bangladesh now provide specialized IT education at the
graduation and post graduation levels. Beside there are about 300 training/education centers
that provide IT technology and technique, which contribute to develop human resources for
software and ITES industries in Bangladesh. Bangladesh now confers academic degrees
including postgraduate and doctoral degrees in the ICT subjects in more than 100 institutions
Md Mahfuzul Quader ,Why Bangladesh is right choice for IT outsourcing; Financial Express; 31
October 2013
10
ibid
11
Why Bangladesh , Business Promotion Council at http://bpc.org.bd/ibpc_whybd.php
7|7 1
including universities, colleges and institutes. According to the Ministry of Education, there
are 73 universities in Bangladesh and more than 60 universities offer IT-related courses.
These universities, colleges and institutes yearly produce more than 6,000 graduates major in
IT related fields. About 2,500 among them are students who majored in computer science or
software engineering.12
These people have the option to better utilize the Government initiatives of building an ICTdriven nation and knowledge-based society.
26.
Internet speed, cost of internet connection, inadequate talent pool or skilled
manpower compared to other market competitors(India, Phillipines), problem of money
transaction, infrastructural problem, inadequate language skill etc are the in generel
impediments in this sector as observed from the available literatures. According to the
Netherlands Trust Fund Phase II team For all the progress that has been made, this report
illustrates some of the key challenges that still lie ahead. Many domestic business leaders
recognize that the Bangladeshi outsourcing industry could better market its strengths to the
international community.13According to this report there are still areas need proper
considerations. Threats like negative perception about Bangladesh, inadequate/ absence of
holistic approach towards promoting the IT/ITES industry including investment climate,
taxation, remittances, legal framework and flexible working hours, challenging economic
conditions need to be addressed properly.
27.
The study of Miller and Atkinson (2014) identified high tax as a major challenge for
this sector. Of the 125 countries examined in this report, over 10 percent have raised ICT
taxes and tariffs to very high levels. Bangladesh has drastically inflated the price of ICT
goods and services, adding close to 60 percent to their cost above the basic price. Turkey and
the Congo add around 25 percent to the price.14
28.
Enabled Service) companies in Bangladesh. There are another few hundred of unregistered
small and home-based software and IT ventures doing business for both local and
international markets.
12
ibid
Bangladesh Beckons - An Emerging Destination For IT/Ites Outsourcing by Netherlands Trust Fund
Phase II team at: http://www.intracen.org/news/New-report-Bangladesh-beckons---an-emergingdestination-for-ITITeS-outsourcing/
14
Ben Miller And Robert D. Atkinson ; Digital Drag: Ranking 125 Nations by Taxes and Tariffs on ICT
Goods and Services , October , 2014 at http://www2.itif.org/2014-ict-taxes-tariffs.pdf
13
8|7 1
Chapter Three
Institutional and Regulatory Framework
GATS Perspective
29.
Trade in Services refers to the sale and delivery of an intangible product, called a
service, between a producer and consumer. Trade in services takes place between a producer
and consumer that are, in legal terms, based in different countries, or economies, this is called
International Trade in Services. Since 90s trade in services came under the auspices of WTO
as a tradable area like goods. The General Agreement on Trade in Services (GATS) came
into effect as an outcome of the Uruguay Round of trade negotiations from 1986 to 1993.The
major objective was to ensure transparency of relevant rules and regulations as well as to
secure and promote a progressive liberalization of this sector. In the way to do so the WTO
members have identified 12 core service sectors which are further subdivided into a total of
160 sub sectors. The sectoral coverage of the IT-ITES industry maintains a major coverage
under Other professional, technical and business service (CPC 83).
Regulatory Bodies in Bangladesh

30.
The responsibilities for ICT activities are fragmented across three ministries: Ministry
of Post and Telecommunications (MoPT), Ministry of Science and Information &
Communication Technology (MoSICT) and Ministry of Information (MoI). MoPT is
responsible for telecommunication infrastructure; MoSICT through its ICT Division (ICTD)
is responsible for e-Government and IT/ITES business promotion while MoI is responsible
for Broadcasting. ICTD conducts its activities through its 3 organizations: Bangladesh
Computer Council (BCC), Office of the Controller of the Certifying Authority and High Tech
Park Authority. The countrys lone ICT Incubator is operating at Karwan Bazar and the 12
storied building Janata Tower is now being renovated to establish the IT/ITES Technology
Park in Karwan Bazar. The ICT Division through High Tech Park Authority is in the process
of appointing Park Operator for the Kaliakoir High Tech Park and has also initiated the
process of acquiring lands outside Dhaka for the establishment of IT/ITES Technology Parks.
Various e-governance implementations are now being implemented by Access to Information
Program (A2I) under Prime Ministers Office and Bangladesh Computer Council (BCC)
under ICT Division. Bangladesh Computer Council (BCC) is a statutory body under the
Ministry of Information & Communication Technology, Government of Bangladesh for
encouraging and providing support for ICT related activities in Bangladesh. It is established
by Act No IX of 1990 passed by the Parliament. Though lack of coordination among various
agencies in implementation of ICT project is one of the challenges but the situation is
9|7 1
improving. Ministry of Local Government and Rural Development, Bangladesh Computer

Council and A2I Program have successfully implemented 4501 Union Information Service
Centers and more collaboration at various levels is taking place. Another ICT village is being
planned to be implemented, at Mohakhali of the Capital City of Dhaka with the publicprivate partnership. More ICT villages and Special Economic Zones are also planned. One of
the proposed ICT villages is to be located at Khulna, which is a divisional city in the western
part of the country.
Government Initiatives, Policies, Acts and Programs
Strategic Priorities of Digital Bangladesh
31.
Digital Bangladesh is a concept which refers to the use of Information Technology
for management, administration and governance to ensure transparency, accountability and
answerability at all levels of society and state. It is an integral part of the governments
Vision 2021 promising a prosperous and equitable middle-income Bangladesh. In the
Background paper for the 7th Five Year Plan (7FYP) it is mentioned The Digital
Bangladesh vision, arguably, runs parallel to the Information Society vision advocated by the
World Summit on Information Society (WSIS). The Honorable Finance Minister of
Bangladesh elaborated on the concept in his budget 2009-10 speech as a socio-economic
transformation process, enabled by information and communication technologies (ICTs). In
the same year, the Honorable Prime Minister outlined the Digital Bangladesh having four key
priorities (a) developing human resources ready for the 21stcentury; (b) connecting citizens
in ways most meaningful to them; (c) taking services to citizens doorsteps; and, (d) making
the private sector and market more productive and competitive through the use of digital
technology. Hence, it was only natural that the 6th Five Year Plan (6FYP) places an equal
importance to Digital Bangladesh as part of the nations development strategy.15
32.
In this connection Govt. has taken important strides in utilizing technology to bring in
tangible transformation in all four areas mentioned by the Prime Minister. There has already
been made some progress in bringing government services to the doorsteps of citizen. Several
acts, policies and guidelines are in place, some are more robust than the others, which is
guiding the nation towards the realization of Digital Bangladesh (see box 1). Two of the
documents, the ICT Policy 2009 and the Strategic Priorities for Digital Bangladesh (A2I,
2011) also contain elaborate work plans. Because of the cross-cutting nature of the vision,
these work plans encompass priorities in almost all development sectors. Hence, the 7th Five
Year Plan (7FYP) needs to consult and align with thoseat the same time, it also needs to
identify scope for revising those documents in light of changes in the national priorities set in
the 6FYP as stated in that report.
15
ACHIEVING DIGITAL BANGLADESH BY 2021 AND BEYOND, Background paper for the 7th Five
Year Plan (7FYP)
10 | 7 1
Box 1: Digital Bangladesh Policies and Regulatory Framework
ICT Policy 2009

Right to Information Act 2009
Perspective Plan
ICT Act 2013 (amended)
Strategic Priorities of Digital Bangladesh
Cyber Security Policy 2010
Rural Connectivity Policy Guideline 2010
Broadband Policy
Mobile Keypad Standardization Policy
Guidelines for Utility Bill Payment
e-Krishi Policy
National e-Governance Architecture
Mobile Banking Policy Guideline
National Telecom Policy 2010
Guidelines on Mobile Financial Services (MFS) for the Bank
Secretariat Instructions 2014 (amended)
Proactive Information Disclosure Guidelines 2014
Innovation Team gazette
National Portal management gazette
33.
This report recognizes the potential of Bangladesh in outsourcing through mentioning
about the outsourcing index by AT Kearney. According to this report though AT Kearney
ranked Bangladesh between 60-70 and it has the potential to be within 20-30. It needs to
develop the confidence of client and investor as Bangladesh has untapped human capital to
capture. Business process outsourcing has the potential to generate and create new job
opportunities for educated youth. It recognized that the export market is critical through
mentioning as follows:
For success in export, market access is very critical. There are number of competent and
capable companies in the country who have not been so far achieved to their potential because of the
lack in market linkage. Since Bangladesh is still not regarded as a major software/IT service exporting
countries (like India), the buyers worldwide are still not pro-actively looking (like in the Garments
Industry where buyers find out suppliers from Bangladesh) for competent service providers from
Bangladesh. It is interesting to note that none of the globally reputed outsourcing/off-shoring
index/ranking list Bangladesh as a potential IT outsourcing countries while some countries which
have much less favorable conditions (in HR, Infrastructure, or business climate etc.) are
listedHowever, in the coming years, if Bangladesh can rightly brand itself and arrange target
market specific business linkage programs, there are possibilities that buyers will seriously look at
Bangladesh as an outsourcing option. This is because the costs in other major outsourcing destinations
(India and China) are getting very high. Also, there are not many countries in the world today that
have the demographic and functional advantage of having a large pool of educated and trainable youth
who, if groomed properly, can offer the unique combination of IT skill and English Language skill at
a very competitive rate. For North American and a number of European countries (where English is
either first or second language), this is quite an attractive proposition.
34.
In this situation to capture the market of outsourcing through potential utilization of
resources it demands government initiatives and measures to develop and increase country
branding. To increase the country branding of Bangladesh different types of initiatives are
11 | 7 1
suggested. It includes policy initiative like the plan for a 10 year master plan by the Ministry
of Commerce/ Ministry of Science and ICT in collaboration with all ICT-related business
associations. Besides action plan for brand image creation includes consciousness generation
through road shows, and targeted marketing efforts.
ICT Act 2006 as well as ICT Act 2013(Amendment)
35.
The summery of the Bangladesh Information and Communication Technology Act 2006 can
be seen in the following box:
Box 2: Summary of ICT Act, 2006

The ICT Law of Bangladesh styled "Information and Communication Technology Act, 2006" provides or
Digital Certificates to be used for signing of Documents. The law provided setting up of the Controller of
Certifying Authorities and the licensing of the Certifying Authorities. The procedures to be followed by
Certifying Authorities are provided for in the ICT Law. The legal enforcement and the appropriate
jurisdiction is given in the Act. There is provision for constitution of special tribunal for handling litigation in
this domain.
The validity of the Digital Certificates is apportioned by this law. The Rules under the Act pertaining to
Certifying Authorities have been framed and are known as "Information Technology(Certifying Authorities)
Rules, 2010". This provides guidelines, advice and information about the factors which the CCA will take
into account in its operation and the functioning of the Certifying Authorities. The ICT law provides legal
recognition to electronic documents and a framework to support e-filing, e-commerce and m-commerce
transactions and also provides a legal framework to mitigate, check cyber-crimes.
The Trust Chain for the public key infrastructure is facilitated by the ICT Act. The Law allows for the setting
up of digital certificate infrastructure and its control by the Controller of Certifying Authorities (CCA)
including conducting audits.
The ICT law has been formulated to support the development of information and communication
technologies in Bangladesh. It is intended to facilitate the application of information and communication
technologies for building information society.
Where the information contained in a document is declared by law to be confidential, confidentiality must be
protected by means appropriate to the mode of transmission, including on a communication network.
Documentation explaining the agreed mode of transmission, including the means used to protect the
confidentiality of the transmitted document as evidence.
The Act was enacted to establish a legal validity and security for information and communication technology
and for formulation of Rules in this regard.
The purpose of this Act is to guarantee the legal security of documentary communications between persons,
partnerships and the State, regardless of the medium used ; the consistency of legal rules and their application
to documentary communications using media based on information technology, whether electronic,
magnetic, optical, wireless or other, or based on a combination of technologies; the functional equivalence
and legal value of documents, regardless of the medium used, and the interchangeability of media and
technologies; the linking of a person, a partnership or the State with a technology-based document, by
allowing them to be identified by certification; and for the harmonization of the technical systems, norms and
standards involved by means of technology-based documents and interoperability between different media
and information technologies.
The Ministry of Information and Communication Technology, Government of the People's Republic of
Bangladesh is charged with the administration of this Act. There have been two amendments to the
Information and Communication Technology Act, 2006 namely ICT ACT 2008 (amendment) and ICT ACT
2009 (amendment).
Source: http://www.dohatec-ca.com.bd/DohatecCA/ICTAct.jsp
12 | 7 1
Usage of ICT in e-transactions, e-commerce and e-procurement have been made possible through the
amended ICT Act 2009 (amendment) which has applied the provision for digital signature certificate
through appointing the 6 certified Controller of Certifying Authority, (CCAP) organizations. 3 CAs
have developed the capacity to provide digital signature certificates to government and private
organizations and individuals. Nothing specific about outsourcing is mentioned in this act.
National ICT Policy 2009

36.
There are ten Strategic Themes mentioned under the National ICT Policy 2009. These
are: social equity; productivity; integrity; education and research; employment generation;
strengthening export; healthcare; universal access; environment, climate and disaster
management; support to ICTs. It is well recognized that Bangladesh has potential to explore
the outsourcing of ICT. In this context the issue of image generation as well as branding of
Bangladesh remains one of the priorities. Considering all these for strengthening export the
strategies are:
Strong and well planned initiatives for marketing and branding of ICT products and services
from Bangladesh;
Ensure secure source of finance for potential software and IT companies;

Develop and secure ICT infrastructure;
Develop industry friendly policies and facilitate necessary environment as well as securing
special facilities to increase export;
Facilitate inventiveness through research and development regarding the development of the
quality of information technology, process, technology, workplace, value chain and niche
market;
37.
The cabinet on February 2015 approved the draft of the 'National Information and
Communication Technology (ICT) Policy-2015'. This policy has been updated in line with
the ICT Policy-2009 and has been revised in consultation with the stakeholders. It was aimed
to develope and promote ICT sector to ensure its effective use to achieve development goals.
The policy covers ten special objectives, 56 strategic themes and 306 action programmes
which will be implemented by different organizations under short, medium and long term
timeframe by 2016, 2018 and 2021. It can be expected that this policy would be a guideline
for ICT sector to ensure comprehensive and effective use of ICT, transparency,
accountability, human resources development through materializing national development
goals by 2021.
Sixth Five Year Plan (SFYP-2010-2015)
38.
Government recognized the high export potential of software and ICT products. ICT
is mentioned as thrust sector based o its performance and potential. The major targets of the
ICT sector in the Sixth Five Year Plan will be broadly as follows:
13 | 7 1
I.
II.
III.
IV.
V.
Expansion of infrastructure facilities for development of ICT sector for

transforming the country into Digital Bangladesh.
Development of ICT skills in public and private sectors for ensuring productivity
and efficiency of the economy and using ICT for good governance.
Ensure women participation in all professional trainings.
Development of national network for establishing connectivity in all government
offices and public key infrastructure for electronic transactions.
Encouragement of IT enabled services and establishment of ICT incubator,
Software Technology Park and IT Village in suitable locations of the country.
39.
The main policies and actions to be taken for achieving the ICT targets in SFYP will
be as follows:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
Increasing public sector allocation for the advancement of ICT in Bangladesh.

Developing ICT infrastructure facilities and expansion of connectivity even to the
remote places of Bangladesh.
Transforming traditional file-based administrative work in the public sector into egovernment/ digital government for better and efficient services to the people.
Expanding education in ICT to cover at least 80 percent of enrolment at secondary
and higher secondary levels and 60 percent at graduate levels.
Training would be women friendly and less expensive.
Training of ICT personnel in selected fields at post graduate levels on a massive
scale.
Effectively linking entrepreneurs within the country with the available ICT both at
home and abroad through a national network.
Exposing the country as a whole to the process of change and progress at the
frontiers of production, development, knowledge and the market through ICT.
Establishment of IT incubator, Software Park, IT village and community e-centre
at suitable locations of the country.
Assessing the need for focusing research in computer software development in the
public and private sectors.
Perspective Plan 2010-2021

40.
In keeping with the aspirations and with the spirit of the liberation war, the
Government of Bangladesh prepared Vision 2021 where this nation needs to be in 2021 the
year which marks the 50th anniversary of Bangladesh's independence. This "Perspective Plan
of Bangladesh (2010-2021): Marking vision 2021 a Reality" is a strategic articulation of the
development vision, mission, and goals of the Bangladesh Government in achieving a
prosperous Sonar Bangla, a dream of the Father of the nation, Bangabandhu Sheikh Mujibur
Rahman grounded in political and economic freedoms a reality in 2021. The Perspective Plan
provides the road map for accelerated growth and lays down broad approaches for eradication
14 | 7 1
of poverty, inequality, and human deprivation. Specific strategies and the task of
implementation will be articulated through the two five-year plan: Sixth Five Year Plan
(2011-2015) and the Seventh Five Year Plan (2016-2020). The expectation is that by 2021,
the war against poverty will have been won, the country will have crossed the middle income
threshold, with the basic needs of the population ensured, and their basic rights respected,
when everyone is adequately fed, clothed and housed, and have access to health care. And all
this is achieved on a sustainable basis without damaging the environment. Furthermore, this
progress will be ensured in an environment where every citizen has the opportunity fully and
positively to contribute to the economy and society and equitably share the benefits from
progresses achieved.
Foreign Exchange Rules and Regulations of IT/IT Based outsourcing in Bangladesh
41.
Bangladesh Bank (BB) has made available an online payment service by the Online
Payment Gateway Service Providers (OPGSPs) to facilitate receiving of small value service
exporters' overseas payments, via the Bangladesh Bank online payment service. To do so
Bangladesh Bank allows the Authorized Dealers to offer the facility of repatriation of
remittances through standing arrangements with internationally recognized Online Payment
Gateway Service Providers (OPGSPs). The OPGSPs such as Paypal, Money bookers, Best
Payment Gateway and Virtual Pay act as online platforms through which the exporters will
be able to receive their overseas payments. According to FE Circular No. 15 Date: August 07,
2011(Repatriation of Export Proceeds Through Online Payment Gateway Service Providers)
the online payment capability will be available only for service export in non-physical form
which does not exceed USD 500. Therefore, the authorized dealers (ADs) will be able to
offer the facility of repatriation of remittances against small value service exports in nonphysical form such as data entry, data process, off-shore IT service, business process
outsourcing through the OPGSPs. Through another circular titled FE Circular No .08, date
August 07, 2012 the limit has been extended from USD 500 to USD 2,000. According to FE
Circular No .08, date August 07, 2012 to facilitate inward remittance against service
export, it has been decided to raise the maximum limit per transaction from USD 500 to USD
2,000 for service export related payments received through OPGSPs.
42.
Bangladesh Bank has circular related to foreign exchange transaction for IT/Software
firms. It has a limitation in financial transaction regarding utilization of balances held in
Exporters Retention Quota (ERQ) accounts without prior approval of Bangladesh Bank. It
allows the ADs to remit up to USD 10,000 on behalf of IT/ Software firms in a calendar year
for bonafide business purposes such as business visits abroad, participation in export fairs and
seminars, establishment and maintenance of offices abroad, import of raw materials,
machineries and spares etc. without reference to Bangladesh Bank.
Tax Structure
15 | 7 1
43.
National Board of Revenue has its own service codes to impose tax. The tax structure
comprises of Value Added Tax (VAT) and Supplementary duty as the Income Tax is
exempted up to 2024. The details of tax structure is shown in the table below:
Table1: Tax structure in Bangladesh
Service
Code
Service
VAT
SD
Comments
S012.10
Telephone
15.0%
5.0%
S012.20
SIM Card Provider
15.0%
35.0%
S099.10
Information Technology
Enabled Services
4.5%
0.0%
VAT- 4.5% of 30% of total

receipt by service provider
S099.50
Online product &

Service
4.0%
0.0%
4.0 of 26.67% of total receipt

by service and provider
S074.00
Rent of Place &

Establishment
9.0%
0.0%
Exemption Withdrawn
Service provided Only through

Mobile RIM & SIM Card
Source: National Board of Revenue, June 2015

44.
It is mentioned in the literature review that the
study of Miller and Atkinson (2014) identified high tax
as a major challenge for this sector in some Asian
Bangladesh records the highest
countries including Bangladesh. In his study he has
tax rate in the South Asia
claimed that Bangladesh has drastically inflated the
region in ICT Goods and
price of ICT goods and services, adding close to 60
Services.
percent to their cost above the basic price. He has
examined 125 countries in his report and showed that
over 10 percent have raised ICT taxes and tariffs to
very high levels. The following figure shows the comparison of tax structure in the Asia.
Sadiq Ahmed, Vice Chairman of the Policy Research Institute of Bangladesh has also shown
in his report Strengthening the ICT Revolution in Bangladesh China imposes the lowest
taxation (3%) while Bangladesh the highest (an astounding 58%). The second highest
taxation is in Turkey, at 26%. Taxes in 40 of the countries in the study are in the low range of
3-5% and taxes in the remaining others are mostly in the 5-20% range. In the global context,
Bangladesh is clearly an outlier in the matter of high ICT taxation.16
Figure1: Comparison of Tax Structure in Asia
16
Strengthening the ICT Revolution in Bangladesh, Sadiq Ahmed, Vice Chairman, the Policy Research
Institute, Bangladesh.
16 | 7 1
17 | 7 1
Chapter Four
Outsourcing and Freelancing
45.
Outsourcing is practice used by different companies to reduce costs by transferring
portions of work to outside suppliers rather than completing it internally. It is an effective
cost-saving strategy when used properly. It is sometimes more affordable to purchase a good
from companies with comparative advantages than it is to produce the good internally. An
example of a manufacturing company outsourcing would be Dell buying some of its
computer components from another manufacturer in order to save on production costs.
Alternatively, businesses may decide to outsource book-keeping duties to independent
accounting firms, as it may be cheaper than retaining an in-house accountant.
46.
According to business dictionary freelance means working on a contract basis for a
variety of companies, as opposed to working as an employee for a single company. 17 On the
other hand a freelancer or freelance worker is a term commonly used for a person who is
self-employed and is not necessarily committed to a particular employer long-term.18 So a
freelancer works as self-employed from anywhere using Internet. A freelancer works
whenever she/he wishes without a long-term commitment. In this case clients are the whole
world of freelancing. It is the best opportunity to utilize ones talent. Robert Benchley rightly
commented "A freelance gets paid per word, per piece or perhaps."
47.
Now-a-days many young Bangladeshis especially students from colleges and
universities are earning from freelancing. According to the people engaged IT related
industries freelancers might earn about $100 million a year by 2020 working as a freelancer
which is five times what the freelancers now earn from jobs outsourced by companies abroad.
A young population base, coupled with advances in technology and good pay, is said to be
the reason for more and more Bangladeshis taking the freelance route, and the flexible
working hours is a bonus.
48.
Due to high income and flexible working hours many people are interested in
freelance work in the country. Inadequate opportunity for quality jobs, especially for young
graduates, is another reason for the increasing popularity of freelance jobs. Freelance jobs
includes software development, customer service, data entry, writing, editing, blogging,
accounting, mobile apps development, web development, search engine optimization, graphic
design and translations.
17
http://www.businessdictionary.com/definition/freelance.html#ixzz3gPlobuZX
18
https://en.wikipedia.org/wiki/Freelancer
18 | 7 1
49.
According to the data from Elance-oDesk, businesses spent around $930 million on
hiring remote independent workers around the globe in 2014, up from $750 million of 2013
which amount is expected to reach $10 billion by 2020. In terms of earnings, Bangladesh is
ranked 7th among 186 countries from where online jobs are outsourced. Currently, the
country has around 5.5 lakh freelancers registered with different freelance marketplaces.
Elance-oDesk has 4.5 lakh registered users in Bangladesh.
50.
Recent statistics show that the number of registered users in the outsourcing market
place freelancer.com is 16,087,399 and the number of projects is 8,106,884. It can be seen
from the website (https://www.freelancer.com/freelancers/) that number of freelancers from all
countries are 79,710 of them Bangladesh has 3802 while India 18004 and Philippines has 2196 freelancers. Another most popular marketplace oDESK which has started new journey
with Elance (https://www.elance.com/) shows that 102,016 Jobs has been posted in last 30
days $1,541,623,177 earned through Elance to date. They have 325,400 Programmers, 44,500
Mobile Developers, 236,500 Designers, 368,600 Writers and 74,300 Marketers and the
number is increasing tremendously in every seconds. According to their data it can be seen
that they have 1,479,314 numbers of Freelancers of which Bangladesh 41,560, India 280,783
and Philippines 71,914.
Outsourcing Marketplaces
51.
Freelance marketplaces (crowdsourcing or outsourcing marketplaces) are websites
that match buyers and sellers of services provided via the internet. Service providers, or
sellers, create a profile where they include a description of the services which they offer,
examples of their work and in some cases information about their rates. Buyers register and
complete a basic profile, they then post projects outlining their requirements. Buyers will
then bid for these projects on a fixed price or hourly basis.19 There are different popular
online earning market places in the world of which Odesk is the best for Bangladesh.
Following box shows some popular market places:
Box3: Outsourcing Marketplacesodesk.com
19
freelancer.com
elance.com
guru.com
vworker.com
scriptlance.com
getacoder.com
99designs.com
joomlancers.com
https://en.wikipedia.org/wiki/Freelance_marketplace
19 | 7 1
Following box shows a snapshot of some of the popular freelancing marketplaces.

Box4: Snapshot of the freelancing marketplaces
Available Project Types

The following box shows some available projects:
Box5: Available projects types
IT & Programming
Design & Multimedia
Writing & Translation
Sales & Marketing
Admin & Data Entry
Engineering & Manufacture
Finance & Management
Legal
Payment Methods
Millions of dollars in e-Commerce transactions are happening every day through various
online transaction platforms. PayPal is one of the oldest online payment providers which have
a major share in the online payment industry. It is the preferred payment mode for millions of
20 | 7 1
people all over the world. There are some other popularly used payment services that are used
as PayPal alternatives for the freelancers.
Selz Payments Solutions
Selz is an user friendly online service ideal for bloggers, freelancer and anyone else looking
to sell digital products or services on the internet. It does not require any prior contracts or
merchant accounts and can be set up very easily in just a few minutes.
Google Wallet
Google Wallet is a digital payment service of Google used to make online purchases through
Smartphone. Primarily used by US bank account holders, Google Wallet can be used to make
purchases in over 160 countries.
Payoneer online payments
Payoneer is a global payment service used in place of PayPal for sending and receiving
payments internationally. A major advantage of Payoneer is its US payment service that
comes particularly handy for sending and receiving payments in countries where PayPal and
some other major US payment services are not available.
Stripe
Stripe is another service that can accept Payments from all across the globe. It currently
supports businesses from US, Canada, UK, and Ireland. One can integrate Stripe APIs in the
website to receive payments.
E-Junkie shopping cart
E-Junkie is one of the oldest online payment platforms that can be integrated with PayPal,
Google Checkout, 2CheckOut and many other payment services. Unlike most modern
payment services, it does not charge you any set up or transaction fees and instead requires a
flat monthly payment depending upon the number of products youre selling and the storage
that you need.
Moneybookers Skrill
Moneybookers Skrill is an e-wallet newly rebranded as Skrill. It offers its customers a safe
and instant way to transfer money online. It has over 25 million customers and is regulated by
the United Kingdom Financial Services Authority (FSA). Its worldwide payment network
offers businesses access to over 100 payment options in over 200 countries including
Bangladesh and territories through just one account. More than 120,000 merchants use
Moneybookers Skrill and it is growing quickly.
In addition to that freelancers can use Bank to Bank Wire Transfer. The following ox shows
PAYPAL transactions at a glance.
Box 6: PAYPAL at a glance
Paypal, owned by eBay, is a global online payment system. As a global e-commerce business it allows
payments and money transfers through the Internet. Online money transfers serve as electronic alternatives to
21 | 7 1
paying with traditional paper methods, such as cheque's and money orders. As a non financial institution it
remains as the most prominent provider of Person to Person (P2P) online payment services. Established in 1999,
PayPal's network builds on the existing financial infrastructure of bank accounts and credit cards. In so doing,
PayPal enables consumers to make payments to one another and to businesses, by using a Visa, MasterCard,
Discover, or American Express card, a debit card, a checking account, or funds held in a PayPal stored value
account. PayPal is an acquirer, performing payment processing for online vendors, auction sites, and other
commercial users, for which it charges a fee. It may also charge a fee for receiving money, proportional to the
amount received. The fees depend on the currency used, the payment option used, the country of the sender, the
country of the recipient, the amount sent and the recipient's account type. In addition, eBay purchases made by
credit card through PayPal may incur extra fees if the buyer and seller use different currencies. On October 3,
2002, PayPal became a wholly owned subsidiary of eBay. Its corporate headquarters are in San Jose, California,
United States at eBay's North First Street satellite office campus. The company also has significant operations in
Omaha, Scottsdale, Charlotte and Austin in the United States; Chennai in India; Dublin in Ireland; Berlin in
Germany; and Tel Aviv in Israel. From July 2007, PayPal has operated across the European Union as a
Luxembourg-based bank.
Today, PayPal has over 20 million registered users, including more than 3 million business accounts. PayPals
account base is reportedly growing by an average of 28,000 accounts per day. PayPal is available to users in 38
countries, and by June 30, 2002, more than $3 billion had been sent through the PayPal network. PayPal is now
available in 56 countries and allows you to send and receive funds in 6 currencies.
22 | 7 1
Chapter Five
Findings
Present Status and Trend of IT& ITES Industry in Bangladesh

52.
The study team was facing difficulties in assessing the size of the international
market, due to non-availability of primary data, and hence it had to depend heavily on the
secondary sources.
Bangladesh Software and ITES Industry
53.
Enabled Service) companies in Bangladesh. There are another few hundred of unregistered
small and home-based software and IT ventures doing business for both local and
international markets. Figure 2 shows number of enterprise, revenue, total human resource
employed in the industry and industry revenue proportion of Bangladeshi Software and ITES
Industry.
Figure 2: Bangladesh Software and ITES Industry
Source: BASIS Survey

54.
The total industry size is estimated to be around Tk. 1,800 crore (US$ 250 million).
Approximately 30,000 professionals, majority IT and other graduates, are employed in the
industry. Though, compared to other traditional mainstream industry, the contribution for
overall employment creation is not significantly high, but if considered in terms of creating
high quality employment (average monthly compensation over Tk. 15,000 per month),
software and IT service industry is surely one of the top graduate employment sectors in the
country.
23 | 7 1
55.
According to a recent survey carried out by BASIS on three hundred of its member
companies. Analysis has been done on business nature, business volume and size of
companies. Over 70% of the companies (Figure 5) are found to be involved in development
and maintenance of software for their clients. A number of those are simultaneously engaged
in providing different IT enabled services for their clients as well. In total, almost half of the
surveyed companies are involved in providing range of IT enabled services (data/form
processing, graphic/web design, content management etc.).
56.
Interestingly, a significant number of companies (18%) have developed software
products or productized services; most of those have been developed over time after repeated
installations for multiple clients. A number of companies are in digital content development
and delivery business, mainly providing content services through mobile platform.
57.
Though from existing literature it is observed that services like Multimedia products
development, Digital Brochure & Digital Magazine, 2D/3D Presentation and Animation,
Audio and Video Editing. Cartoon Animation, Customized Database Application., Enterprise
Resource Solutions, Legacy Application development, Banking and Financial Solutions.,
Device Driver development, Smart Card Solutions., Web Programming., Web Content
Writing., Web update & Related services, Pre-press Graphics Design, CAD/GIS Services.,
Architectural Design, Data Entry services, Medical transcription processing (All types),
Bank, Call centre services are outsourced from Bangladesh to foreign countries, there is no
national level data available in these services. Yet, Bangladesh Bank processes some data
generated through banking channel. Bangladesh Bank processes data as per International
Monetary Fund (IMF) 6th Manual of Balance of Payments. A discussion meeting was
constituted at Statistics division of Bangladesh Bank where it was agreed that BB statistics
may be understated if the payments are not made through proper banking channel, especially
through International Credit Cards. Yet since most of the enterprises uses banking channels,
it could be safely argued that receipts earned from exports by enterprises are covered service
BB statistics in most part.
Global Trade of Bangladesh
58.
Following table shows the total export of IT/ITES Services under the heading of
Computer Services which includes total receipt of foreign currency (equivalent to
Bangladeshs expert) was US$ 125.54 Million in FY 2013-14 out of which computer
software was US$ 69.41 Million while Computer data processing and computer consultancy
services were exported US$ 47.56 million and US$ 8.57 million respectively. Bangladesh has
maintained an excellent growth rate in this sector.
24 | 7 1
Table2: Total Export of IT/ITES Services

2009 - 2010
Computer
services
35.35
Growth
1. Export of
computer
software
2.. Computer data
processing
3. Computer
consultancy
services
2010 - 2011
2011 - 2012
2012 - 2013
2013 - 2014
45.31
70.33
101.63
125.54
28.16%
55.23%
44.50%
23.53%
25.66
31.38
43.51
63.24
69.41
6.54
8.81
21.97
32.89
47.56
3.15
5.12
4.85
5.50
8.57
Source: Bangladesh Bank

59.
Following table shows the country wise export of IT/ITES Services from FY 2009-10
to FY 2013-14. Under the heading of Computer software which includes total receipt of
foreign currency (equivalent to Bangladeshs expert) was US$ 69.409 Million in FY 2013-14
out of which US$ 20.069 Million received from United States of America (USA), US$
15.746 Million from Hong Kong and US$ 15.746 million from Republic of Korea. Moreover
Bangladesh also exports to Singapore, Germany, Norway, Denmark, Canada, United
Kingdom (UK), Ireland and some other countries. It can be observed from the table that
Bangladesh has maintained an excellent growth in those countries. In case of Computer data
processing Bangladeshs total export amounted US$ 47.564 Million in FY 2013-14 and top
four destinations are USA(US$ 22.930 Million ), Singapore(US$ 6.747 Million), UK(US$
4.746 Million) and Denmark (US$ 2.699 Million). Total export under the heading Computer
consultancy services amounted US$ 8.571 Million and the main export destination is the
USA.
Table3: Country wise Export of IT/ITES Services
2009-10
Export of computer
software
UNITED STATES
OF
AMERICA
(USA)
HONG KONG
KOREA,
REPUBLIC OF
SINGAPORE
GERMANY
NORWAY
DENMARK
CANADA
UNITED
KINGDOM (UK)
IRELAND
Other Countries
2010-11
2011-12
(Values in Million US$)

2012-13
2013-14
25.664
31.379
43.506
63.241
69.409
14.242
21.180
27.089
36.515
20.069
0.509
0.011
1.050
0.000
5.143
0.000
11.406
0.116
15.746
9.493
1.774
1.458
0.074
1.721
0.355
1.013
2.272
0.661
0.064
1.410
0.779
1.216
0.930
0.968
1.174
1.473
1.161
1.931
1.298
1.820
2.006
1.531
0.975
3.232
4.796
3.391
3.092
2.281
1.742
1.544
0.061
4.445
0.091
2.655
0.405
3.233
0.030
4.311
1.242
6.014
25 | 7 1
Computer
data
processing
United States of
America (USA)
Singapore
United Kingdom
(UK)
Denmark
Canada
Netherlands
Australia
Malaysia
Germany
Hong Kong
Other Countries
Computer
consultancy
services
United States of
America (USA)
Singapore
Canada
Germany
United Kingdom
(UK)
Korea, Republic
of
Netherlands
France
China, Peoples'
Republic of
India
Other Countries
6.535
8.809
21.973
32.889
47.564
4.005
5.219
10.265
15.332
22.930
0.182
0.704
0.406
0.384
3.767
1.726
3.923
4.690
6.747
4.746
0.327
0.114
0.272
0.022
0.026
0.240
0.003
0.641
3.154
0.384
0.199
0.388
0.027
0.031
0.243
0.114
1.414
5.121
1.922
0.273
0.492
0.701
0.764
0.321
0.097
1.645
4.852
1.925
0.647
0.608
0.573
1.062
0.572
0.244
3.313
5.498
2.699
1.388
1.266
1.030
0.885
0.865
0.572
4.436
8.571
1.860
2.918
1.845
2.282
4.604
0.035
0.072
0.218
0.296
0.161
0.086
0.133
0.576
0.352
0.100
0.100
1.243
0.193
0.382
0.083
0.404
0.821
0.688
0.569
0.465
0.001
0.005
0.022
0.003
0.339
0.034
0.003
0.003
0.037
0.069
0.000
0.046
0.159
0.048
0.090
0.181
0.315
0.186
0.172
0.126
0.003
0.627
0.055
1.081
0.034
0.903
0.187
1.375
0.101
0.501
Performance of IT Enabled Services Outsourcing in Bangladesh

Following figure shows the recent trends in export of computer related services in
Bangladesh from FY 2009-10 to FY 2013-14. In case of the export of computer services
which include-Export of computer software, Computer data processing, Computer
consultancy services, it can be observed that export of computer software has the highest
growth during this period. Export of computer data processing has also witnessed higher
growth next to export of computer software. Computer consultancy services growth is also
positive. Country wise data show that highest growth of Bangladesh export of computer
software has witnessed in the USA. USA is also the main destination for export of Computer
Data Processing and Computer Consultancy Services for Bangladesh during this period.
26 | 7 1
Figure 3: Recent Trends in Export of Computer Related Services in Bangladesh

Export-Computer Services
Export-Computer Software
Export-Computer Data Processing
Export-Computer Consultancy Services
Following table shows the country wise payments made by Bangladesh (Import) for
Computer Consultancy Services from FY 2009-10 to FY 2013-2014. It is evident from the
table that the total import is US$ 4.53 Million in FY 2013 2014 while it was
US$ 3.47
Million in FY 2009-2010. The main import destinations are India, Malaysia, UK, Singapore,
USA but the imported amount is too small.
Table 4: Country Wise Payments Made by Bangladesh for Computer Consultancy Services
(Million US$)
2009 - 2010
2010 - 2011
2011 - 2012
2012 - 2013
2013 - 2014
Computer
Consultancy
Services
India
Malaysia
United Kingdom
(UK)
3.47
4.18
2.90
0.77
4.53
1.09
0.48
0.26
1.54
0.51
0.75
0.74
0.07
0.44
0.24
0.04
0.02
1.01
0.93
0.56
Singapore
United States of
America (USA)
0.26
0.15
0.16
0.10
0.23
0.14
0.18
0.00
0.48
0.40
27 | 7 1
Switzerland
0.56
0.44
0.30
0.36
South Africa
0.46
0.29
0.13
0.19
0.00
0.22
0.11
-
0.16
0.02
0.04
0.01
0.26
0.02
0.12
0.12
0.09
0.35
0.34
0.29
0.01
0.20
Ukraine
Sri lanka
Hong Kong
Other Countries
Source: Statistics Division Bangladesh Bank
Following table shows the country wise payments made by Bangladesh (Import) for Computer
Data Processing Services from FY 2009-10 to FY 2013-2014. It can be seen from the table that
total import of Computer Data Processing services is US$ 1.72 Million in FY 20132014 which
is very small.
Table5: Country Wise Payments Made by Bangladesh for Computer Data Processing Services
(Million US$)
Computer Data
Processing
Singapore
India
United States of
America (USA)
2009 - 2010 2010 - 2011 2011 - 2012 2012 - 2013 2013 - 2014
0.21
0.37
0.44
3.73
1.72
0.01
0.00
0.08
0.10
0.09
0.13
0.01
0.03
0.10
2.63
0.17
0.14
0.56
0.55
0.20
0.03
0.03
0.02
0.16
0.14
Denmark
China, peoples'
republic of
0.00
-
0.06
0.04
United Arab Emirates

(uae)
0.01
0.02
0.01
0.08
0.01
0.01
0.25
0.02
0.00
0.00
0.62
0.02
0.00
0.00
0.14
United Kingdom (UK)
Italy
Hong Kong
Canada
Other Countries
Following table shows the country wise payments made by Bangladesh (Import) for Import
of Computer Software from FY 2009-10 to FY 2013-2014. From the table it is observed that
Country wise total payments made by Bangladesh (Import) for Computer Software is US$
3.06 Million in FY 20132014 which is relatively higher that other services. The main import
destinations are Singapore, Sweden and Switzerland but the amount is still not that much
significant.
28 | 7 1
Table6: Country Wise Payments Made by Bangladesh for Computer Software

(Million US$)
2009 - 2010 2010 - 2011

Import of
Computer Software
Singapore
Sweden
United Kingdom
(UK)
0.01
-
India
United States of
America (USA)
Switzerland
Hong Kong
Germany
Sri Lanka
Other Countries
0.01
-
0.02
0.00
0.02
2011 - 2012
2012 - 2013 2013 - 2014
0.76
0.63
3.06
0.18
0.28
0.03
0.04
1.80
0.58
0.00
0.04
0.09
0.07
0.00
0.09
0.00
0.00
0.00
0.17
0.00
0.00
0.36
0.02
0.12
0.26
0.00
0.01
0.00
0.32

Following figure shows the Recent Trends in Import of Computer Related Services in
Bangladesh from FY 2009-10 to FY 2013-2014. It can be seen from the figure that in case of
Import Payments of Computer Services the growth trend of Computer consultancy services
is significant with a decline in 2012-2013.
Figure4: Recent Trends in Import of Computer Related Services in Bangladesh
Import Payments of Computer Services
Import of Computer Software
Import of Computer Consultancy Services
Computer Data Processing Services
29 | 7 1

Business Specialization of BASIS Member Companies
60.
One of the most encouraging recent trends in the industry is that, leveraging on recent
positive changes like larger Internet user-base, better connectivity as well as introduction of
new payment methods (online payment through credit card and mobile payment), a good
number of companies (around 45%; some dedicatedly and some along with their core
software or IT service business) are focusing or diversifying on different web based services
that include specialized portals, listing services, e-Commerce, e-Learning, payment
intermediary services etc.
Figure 5: Business Specialization of BASIS Member Companies
Source: BASIS Survey
61.
A number of these ventures have done quite well in terms of popularity as well as
financial viability. Off late, some companies are also developing web applications based on
cloud/SaaS delivery model. These emerging new business and service delivery models might
define the new wave in the coming years for Bangladesh IT industry.
62.
With regard to average size of enterprises within the industry, it is interesting to note
that, the distribution is quite spread with respect to both revenue size and employment
number. Majority of the companies are in the range between10 to 50 people in employee size.
30 | 7 1
Similar pattern can be found in revenue size of the companies. However, there are few
product companies who have relatively less number of people for significant revenue.
IT related Associations in Bangladesh
BASIS
63.
Bangladesh Association of Software and Information Services (BASIS) is the national
trade body for Software & IT Enabled Service industry of Bangladesh. Established in 1997,
the association has been working with a vision of developing vibrant software & IT service
industry in the country. BASIS started its journey with only 17 charter members. Today the
membership stands at more than 450. Members of BASIS account for the lion share of the
total software & IT services revenue of the country.
Cyber Cafe Owners Association of Bangladesh

64.
An association established for taking action for preservation of rights and interests of
the members of the association and generally for the development of the business/services
related to Information Technology of Bangladesh with special reference to Cyber Cafes
BCS
65.
Bangladesh Computer Samity is the voice of ICT industry of Bangladesh. It is the
national association of the ICT companies in Bangladesh. BCS was established in 1987 with
eleven members. The ICT industries of Bangladesh comprises distributors, dealers, resellers
of computer and allied products, locally assembled computer vendors, software developers
and exporters, internet service providers, ICT based educational institutions and training
houses, ICT embedded services providers etc. The total number of members stands 1028 at
present. The body is run by a 7-number executive committee elected every two years.
Potential and Export Opportunities
Potential Sectors for Bangladesh
66.
There are many sectors where Bangladesh can develop. Considering the resource
endowment of raw unskilled but moderately educated population, Design and Creative sub
sector is likely to be the most potential area for Bangladesh. More specifically, Prepress
Graphic Design where minimum educational requirement is low, H.S.C. with moderate
command in English is suitable and training is comparatively cheap and available. Besides,
Animation, Illustration, Presentations etc are amongst the potential jobs in Design & Creative
sub sector. Information on 15 freelancers suggests that 7 of them involve this sector. Admin
31 | 7 1
Support is another very potential sub sector, especially for freelancing. Six (6) enterprises out
of twenty six (26) took this sector as their main line of business. Admin Support is very
potential especially for freelancing. Web, Mobile & Software Development is another
category where Bangladesh has higher potential as the number of IT experts is increasing.
However, since this category, especially software development is highly a skill based
category, low level of salary and other benefits may lead to create propensity among the
experts to migrate abroad. Twelve (12) enterprises out of twenty six (26) use this sector as
main Business area. So at intuitional level this sector has high importance. Besides, this
sector has high promise for freelancing as well as 8 out of 15 freelancers performs this work
along with other works. Desktop Software Development, Ecommerce Development, Game
Development, Mobile Development, Product Management, QA & Testing Scripts & Utilities,
Web Development, Web & Mobile Design are also some potential sub-sectors for
Bangladesh. Besides, Admin Support such as data entry, Sales and Marketing like Search
Engine Optimization, Writing, IT and Networking are amongst potential IT/ITeS outsourcing
Services.
Potential Export Destinations
67.
Findings from Enterprise level is consistent with the statistics shown earlier by
Bangladesh Bank Information from 14 enterprises shows that 11 of them were engaged
exporting in U.S.A, the major export destination of Bangladesh in IT/ITES sector. Australia,
Canada and a few EU countries were the other potential export destinations by most firms
among these 14 firms. Following figure shows the countries as export destinations by 14
enterprises of Bangladesh in 2014.
Figure 6: Countries as Export Destination by 14 Enterprizes of Bangladesh in 2014
Countries as Export Destination by 14 Enterprizes in 2014
Sweden
Netherland
U.A.E.
Brazil
India
Denmark
Canada
U.S.A.
0
6
8
No. of Enterprizes
10
12
Source: Own Analysis from Survey Data collected for this study
32 | 7 1
Prospects
Following figure shows the number of contacts made by 18 Enterprises over the last 5 years
with foreign clients to work on regular basis. Information from 18 enterprises shows that they
concluded 285 contacts with foreign clients to work on regular basis over the last 5 years.
The most prominent countries are U.S.A. Australia, Canada, Denmark, Netherlands, Sweden,
U.K. etc are. These countries are very potential for Bangladesh.
Figure 7: Number of contacts made by 18 Enterprises over the last 5 years
Other Countries
25
2
2
China
5
U.K.
10
10
13
14
Natherlands
Canada
24
43
U.S.A.
137
0
50
No. of Contracts
100
150
Potential of Employment Generation

68.
The following table shows Information Technology Workforce in Bangladesh at a
glance. According to the table, number of IT professionals working within the IT Industry is
more than 20,000, number of IT professionals working outside IT Industry (including
business enterprises, govt. telecom, NGOs etc.) is more than 35,000 and number of graduates
produced yearly from IT related subjects is more than 5,500. In addition to the registered
workforce, a large number of independent freelancers (both students and professionals) have
been working in this sector. Moreover, annually on an average 5,500 students graduate from
ICT related courses from more than 80 public and private universities. This number is
increasing day by day.
Table7: Information Technology Workforce in Bangladesh
No. of IT professionals working within the IT Industry
20,000 +
No. of IT professionals working outside IT Industry (including 35,000 +

business enterprises, govt. telecom, NGOs etc.)
Yearly no. of graduates from IT related subjects
5,500+
Source: BASIS
33 | 7 1
Following figure shows an analysis on HSC examination result with a view to exploring the
potential for future employment generation for this sector. There is no denying the fact that
higher secondary level is that stage of education where one decides his future career. For that
reason the result of HSC examination for general education from 2005 to 2014 has been
chosen for analysis. It was tried to compare the examination result of Business Studies,
Science and Humanities group. It is observed that in 2005 the number of students passed
from Humanities (1,05,843), Science(64,589), Business Studies (75,104). These number
rapidly increased and becomes Humanities (3,21,770), Science(1,29,167), Business Studies
(2,41,753) in 2014. These increasing trend shows that there is a huge scope for future
employment generation for this sector. Unfortunately, the number of students passed from
science group is comparatively less than those of Humanities and Business Studies group. In
this connection, Govt. may take initiatives to attract students to study science because
students passed from science group have more potential than other two groups to work for
this sector as traditionally they have higher mathematical aptitude and superior logical &
analytical abilities.
No. of Students Passed
Figure 8: Results of HSC Examination 2005-2014
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Business Studies
Year
Science
Humanities
Source: Own analysis from BANBEIS Statistics

There are no perfect criteria to prepare statistics for
meritorious students. Result could be one of the
major indicators to select meritorious students. That
why the criterion of having GPA 4 and above in the
HSC examination result has been taken in
consideration for a deeper analysis. Students having
GPA 4 and above in the HSC examination result
could be trained up for future employment for this
sector. If 5% students passed HSC with GPA 4 or
If 5% students passed HSC with GPA 4

or above join in this sector and earn
$500 on an average per month then
only new entrants in this sector might
contribute at least 65-70 Million USD
each year to GDP.
34 | 7 1
above join in this sector and earn $500 on an average per month then only new entrants in
this sector might contribute at least 65-70 Million USD each year to GDP.
No. of Students
Figure 9: No. of Students Passed HSC Exam with GPA of 4.00 or more in a Scale of 5.00
120,000
100,000
80,000
60,000
40,000
20,000
0
2005
2006
2007
2008
Boys
2009
Year
2010
2011
2012
2013
2014
Girls
Source: Own analysis from BANBEIS Statistics BANBEIS Statistics

The following boxes (Case Study 1 and Case Study 2) show case study on two successful
freelancers who have developed themselves as entrepreneurs.
Box7: Case Study 1
Shamsul Anam Emon, Post Graduate in Economics from Janahngir Nagar University joined in a Leading
Private commercial Bank as Management Trainee. The career was smooth and he performed well there. But in
2010 he lost a bulk amount of money in Stock Market, which was invested from different Credit cards and
Bank Loan. It was a disaster!
He realized that he was overconfident in his investment and after a few days all the banks pressurized him to
pay the installment of credit cards and personal loan. But it was simply impossible for him to meet all of their
minimum needs from his salary. He started to find a substitute way of income besides banking and heard about
freelancing from one of his clients (they are now good friend).
Emon build a profile on freelancer.com and started bid over the Research, Article Writing and Data Entry
Projects. But, no one knocked him for first few months. He took the patience and keeps bidding. After 5
months of top level patience, study, research, dedication, consistency and dedication he was awarded a project
in $90. The Endless journey has started! Within next 2 years he had completed over 200 projects. Some
projects were as big as around $2000. It was not possible for him to complete all projects with him alone as he
was a full time banker. So, he started to hire people from his surrounding area and trained them about different
data entry, web search and research related works. Sometimes, he hired skilled writers from USA, UK also for
his Content Development Projects.
2014 and 2015 are the turning point of his Online Career. He got some big projects and made a work
agreement with a Leading Real Estate Company of Canada.
He has awarded by BASIS as Best Individual Freelancer under Content Development in 2014.
Now, besides the regular works he has started Apps Development, Affiliate Businesses and Blogging and
planning to switch his career from banking to Full Time Online Entrepreneur.
According to Emon the key success factors are :
Patience , Consistency and Passion

Lots of Study
35 | 7 1
Try to find the solution of any problem from Google not from other freelancers
Never run after the money, rather try to deliver Quality work
Try to find the Business Opportunity of the work that you have done for your employer
Regular contact gets business; knock your previous clients regularly. Wish them in special
occasion
Again! Study, study and study.
Box 8: Case Study 2

G M TasnimAlam, a 26 year young entrepreneur, graduated from BUET in CSE, started his career at a local
software firm as iOS App Developer back in 2011. While working there he was curious about outsourcing
works and how it works. He tried to apply several jobs in oDesk and in 2011 he got his first job in oDesk.
After completing the job that worth 600$ (42,000 BDT) successfully the client was so happy that Alam was
awarded 1000$ (BDT 70,000) bonus for doing the job efficiently and in time. This was really pumped Alam
and he earned 3 times than his salary in just a one month. Then he got few quick offers from oDesk from
different clients and got very busy with the works in oDesk that he couldnt continue the day job and left the
job. Then he became full time freelancer from 2012. Over the last 4 years he has worked on more than 130+
projects with 4.99 STAR feedback in oDesk. Apart from that he gained so much experience working with the
foreign clients and dealing with them and producing successful products, he started believing in having his
own software firm. And that came true in February 2014. He founded his startup named Encrypto Mobile
Apps with few other developers and employees. Now he has a team of 3 developers 2 designers and an
assistant. He is now CEO at that firm. G M TasnimAlam was also awarded Outsourcing Award by BASIS in
2014 in Mobile Application Category.
What started as a quest for extra money and gaining work experience, freelancing by students and
professionals has turned into a fledgling industry in Dhaka and elsewhere in Bangladesh. In the absence of
any large software companies in Bangladesh, skilled young professionals are seeking out alternative
methods to leverage their proficiency in order to make some money. This has led to a thriving software
freelancing community in Bangladesh. Even without any marketing or corporate backing, nearly 10,000
freelancers from Bangladesh billed over USD 7 million in 2010, catapulting the country to the seventh
position among freelance worker nations, and Dhaka- the capital city, to the top 5 cities for freelance
outsourcing work.
The rapid growth in Bangladeshs freelancing community can be attributed to ease of setting up operations
limited infrastructure needs and an internet connection. A combination of good English skills and low labour
costs has made Dhaka a top destination for freelance outsourcing jobs, which typically include editing, proof
reading, translation, data entry, web research, virtual assistance, web design and software programming. Many
of the workers are students of Engineering and Technology Universities supplementing their allowances. Many
non-engineering students are employed in data entry projects, earning close to USD1000 per month depending
on the complexity of the assignment and experience levels. Although the contribution from freelancers may
seem small in isolation, their aggregated contribution in employment generation and export income are not
insignificant.
Despite the stronghold of freelancing in Bangladesh, challenges remain in terms of high-speed internet
facilities, cheap bandwidth, newly introduced taxation and online payment facilities. Paypal, for instance, is
36 | 7 1
not supported in Bangladesh. In addition, these young IT professionals/entrepreneurs need to be guided in

terms of business development, investment planning and organizational capability to contribute more
meaningfully to the countrys software industry. But despite these challenges, in a world grappling with
global recession, freelancing is increasingly being considered a viable alternative to traditional modes of
outsourcing by clients keen on cutting costs. If the recent reports from oDesk and eLance are any indication Bangladesh seems well poised to make the best of this opportunity.
Status of ITES Training in Bangladesh

A variety of ICT training institutions are available at present in Bangladesh. They are
providing with various issues covering ICT. In 2005 Bangladesh Bureau of Education
Information and Statistics (BANBEIS) of the Ministry of Education in collaboration with
Korea International Cooperation Agency (KOICA) initiated a project titled Establishment of
Bangladesh- Korea ICT Training Center for Education (BKITCE) with a view to improving
the capacity of Bangladesh ICT human resources through providing ICT application training
to citizens. Government also established National Academy for Computer Training And
Research (NACTAR) by the act 12 of 2005. NACTAR has been providing practical and
pragmatic training of ICT since its inception.
The Small and Medium Enterprise Foundation (SMEF) started a training programme for
developing 3,000 women across the country as grassroots ICT entrepreneurs and freelancers.
The SMEF, the Access to Information (a2i) Programme of Prime Ministers Office (PMO)
and Bangladesh Women in Technology (BWIT) jointly took up the initiative titled Female
ICT Freelancer and Entrepreneur Development Programme. In addition to that government
recently launched a training program to develop 30,000 IT professionals for the IT and ITES
sectors within the next three years. Bangladesh Association of Software and Information
Services (BASIS), Access to Information (A2I) Programme jointly and individually also
organizes different national and international level training programmes through different
projects. Moreover ICT short courses at different universities, institutions and training centers
are frequently offered.
Some freelancers expressed their disappointment regarding training facilities offered by
different institutions and training centers. New freelancers also fail to receive proper training.
Freelancers, especially those who live outside of Dhaka city, suffer badly due to this problem.
Although there are many training institutions but a few of them are the need based and
specialized. Very few quality institutions offer ITES outsourcing related training.
Following table shows training programs arranged and attended by 18 enterprises.
Information on 18 Enterprises shows that over the last 5 years, total number of training
arranged by enterprises was 869. These enterprises arrange training jointly with the
government or others was only 5. So, there is scope to work on this ground. However
participation in training programs organized by government is also likely to be low.
37 | 7 1
Table 8 : Training Programs arranged and attended by 18 enterprises

Organizer
No. of Training
Arranged
by
Enterprises
869
By the enterprise itself

Arranged by Government
Jointly
Others
No. of Training Organized

by Others but attended by
enterprises
23
5
160
Grand Total
874
183
Challenges faced by Bangladesh

Challenges at Firm Level
69.
In order to find out the degree of different issues that hiders the progress of IT/ITES
enterprises. Likert type scaling technique is used and obstacles are arranged on the basis of
ranking of average scores. A 5 (five) scale Likert scale is used where score 1 is assigned for if
the respondent feels that there is no obstacles, 2 for moderate obstacle, 3 for moderate
obstacle, 4 for major obstacle, 5 for severe obstacle. It is important to note that many issues
may not be respondent for many reasons, for example lack availability of time of the
respondent, individual idiosyncrasies to skim through the questionnaire etc In these cases,
missing value on some issues may lead to underestimate by the actual total score. To avoid
such problem average score for any particular issue is calculated by replacing the missing
values by the mean value of scores of respondents for that particular issue. Thus the average
score is calculated using the following formula
Average Score =
5 L .f
5
i=1 i i
i=1 L i .f i +M
n
where
Li= Scale point ( i= 1,2,.............5)
fi = Frequency for particular scale point i
M=Number of missing value(s)
n=Total number of actual respondent for particular issue
N= Total Number of Observations (In this study N=26) for all issue
Table 9: Likert scale analysis
Obstacle Issues
Scale Points***
1
2 3 4
5
Frequency
Electricity load
1
0 9 11 5
shedding
No. of Non Actual Projected Average

Respondent Score* Score**
Projected
(M)
Score
0
97
97.00
3.73
38 | 7 1
Foreign Exchange
Policy
Cost of obtaining
internet bandwidth
Country Image or
Branding
Access to Finance
Shortage of Skilled
Manpower
Lack of proper
infrastructure
Lack of capital
Obtaining permits
(if any)
Smooth transaction
of payments
Rules and
regulations of
government
Internet bandwidth
(speed)
Access to market
information
Tax Policy
Enforcing contract
with the client
Loyalty of staffs
Obtaining quality
certification
Obtaining work
order
Obtaining
recognition from the
clients
Communication
(language)
83
93.83
3.61
10
88
91.52
3.52
11
51
88.40
3.40
1
5
7
2
8
7
7
10
3
2
1
1
82
80
85.28
83.20
3.28
3.20
70
79.13
3.04
4
5
5
5
7
7
7
3
3
3
0
4
78
63
78.00
74.45
3.00
2.86
74
74.00
2.85
10
74
74.00
2.85
12
72
72.00
2.77
66
66.00
2.54
12
8
2
6
5
7
4
5
3
0
1
1
62
61
64.48
63.44
2.48
2.44
7
7
8
8
6
6
4
5
1
0
0
0
62
61
62.00
61.00
2.38
2.35
58
58.00
2.23
11
49
49.00
1.88
12
48
48.00
1.85
*Actual Scores, **Sum of Actual Scores plus replacement scores for missing value
Note: N/A means non response ***Scale Points: 1= No Obstacle 2= Minor Obstacle 3= Moderate
Obstacle 4= Major Obstacle 5= Severe Obstacle
70.
Electricity Load shedding ranked as topmost obstacle. As the sector is highly
computer oriented, the operation of business requires uninterrupted supply of electricity.
Electricity load shedding is a common constraint for all industries. However, high electricity
load shedding force enterprises to use alternative power supply like generators which
increases costs.
71.
Foreign Exchange policy is another major problem. This policy hinders business
when it is required to make payment for import of software, books etc. Enterprises also worry
39 | 7 1
about the cost of internet. Many entrepreneurs feel that the cost of internet is much higher
than other competing countries.
72.
Lack of Promotion of Country Image or Branding is one of the major problems that
many entrepreneurs feel to be fixed out. The issue is not responded by many entrepreneurs,
the problems ranked highly if picked by the respondent. As our average score compensates
the missing values or by the mean score of respondents and the mean of respondents is high,
the averages score gets high. It is important to note that the slogan of Digital Bangladesh
has promoted the country image in IT sector by a great deal. Now some more Branding
Campaign needed.
73.
Access to finance is another significant problem. It is hard to get loans from banks.
Information on 17 enterprises shows that only one of them took bank loan at the beginning of
business. As a service sector, the output is not as visible as goods sector which is a real
problem. Besides, Enterprises also lack proper
financial reporting which further discourages bankers
to provide loan. Information of yearly investment
Enterprises also worry about the cost

flow from 11 enterprises shows that there is great
of internet. Many entrepreneurs feel
that the cost of internet is much higher
disparity in investment though total investment
than other competing countries.
accounted for 14.25 Crore in FY 2013-14. Only two
As a service sector, the output is not

of them invested in more than 4 Crore in 2013-14
as visible as goods sector which is a
real problem.
while the others are making very small amount of
One of the Key challenges of the

investment not exceeding BDT 90 lacs Even few
IT/ITES sectors in Bangladesh is the
others did not invested more than BDT 10 lacs.
employee turnover which is high
especially in high skilled sectors like
However, total investment of these 11 firms grew by
software development.
68.36% compared to preveous year which is a
pleasing sign. Hardly any firm made business
expansion from Bank loans.
74.
Skilled Manpower is another problem especially for services that require advanced
skills. Many enterprises think that they could not make expansion for lack of capital. One of
the Key challenges of the IT/ITES sectors in Bangladesh is the employee turnover which is
high especially in high skilled sectors like software development. There is increased and
consistent demand for IT/ITES experts in developed countries. The visa requirements in
countries like Canada, USA, UK etc is much easier. So, experts are migrating from
Bangladesh to developed countries for higher education, better earnings as well as standards
of living. Interviews with many entrepreneurs revealed that each year such migration is up to
5% of total employees. This is a constant threat for the development of this sector.
Government and Private sector should work together to fix the problem. Government may
provide few incentives for export oriented IT Professionals. For example, government may
rebate income tax up to some percentage point. Government can afford this as the number of
IT/ITES professionals is relatively low.
40 | 7 1
75.
Private sector also needs to play their role to retain their skilled employees by better
working environment. Introduction of post retirement benefits like provident funds, standard
salaries and other compensation packages like profit bonus, lunch, medical allowance etc.
76.
There is also lack of proper infrastructure. Although government is making high-tech
park and other facilities, enterprises needs to get proper incentives and support socio
economic environment around such parks so that experts may lead sound and healthy
livelihood around the park.
77.
Needless to mention that the IT is a sector for entrepreneurship predominantly by IT
professionals, not by traditional millionaires. So initial investment, IT professionals lack
capital needed and in the absence of knowledge by Banks, the problem is vital.
78.
Business related rules and regulations also hinder to some extent the business,
licensing procedure, import procedure needs to be much easier. However, other obstacles
listed in the table above are minor. While opening a business key licenses/permits required by
an entrepreneur include Trade License, Certificate of incorporation, Memorandum of
Association, VAT Registration Certificate, Tax Identification Number which different
departments of the government. Besides, Export registration certificate is required for export
purpose and perdition from Board of investment is required from Board of Investment for
forming joint venture companies. Enterprises require simplification of procedures in
obtaining those certificates and procedure.
79.
Lack of capital at initial level is barrier for new entrepreneurs. The IT & ITES
enterprises so far have progressed by self entrepreneurship. Data on 18 enterprises shows that
77.62% of total initial investment made by 18 firms came from self financing while only
2.53% came from banks. Among these 18 enterprises, only one could get loans from Banks.
Though the sample size is small, yet it could be assessed from the following figure that the
institution funding is very low which is against the smooth progress of this sector.
Figure 10: Source of Initial Investment
41 | 7 1
Source: Information provided by 18 IT& ITES enterprises
Reasons for Entrepreneurs for Choosing this Sector for Investment

80.
Information from 25 entrepreneurs showed that most of the entrepreneurs chosen this
sector for investment for having a prior experience in this sector (32%) and passion (24%).
The other reasons were High rate of return (16%). Market Access of the industry (16%), low
capital requirement (8%) and low risk (4%). Following figure shows the reasons for
entrepreneurs for choosing this sector for Investment.
Figure 11: Reasons for Entrepreneurs for Choosing this Sector for Investment
High rate of return
16%
32%
8%
4%
16%
Low capital requirement

Low risk
Market Access of the industry
24%
Passion
Source: Information provided by 25 IT& ITES enterprises
81.
Following table shows the source of initial investment funds by type of 18 enterprises.
It is observed from the table that Self Financing is higher (1,535.24 Lac Taka) than other
source of initial investment. This sector needs to attract more domestic and Foreign Direct
Investment.
Table 10: Source of initial investment funds by type of enterprise (18 Enterprises)
(Lac Taka)
Row Labels
Partnership Private Limited
Sole
Proprietorship
50.00
250.00
12.00
30.00
Total
Banks
Friends & Relatives
Non Bank Financial
Institutions
100.00
Other
50.80
1,453.25
Self Financing
50.80
1,853.25
Total
Source: Own Calculation from Survey Data(18 Enterprises)
50.00
262.00
30.00
31.19
73.19
100.00
1,535.24
1,977.24
42 | 7 1
Challenges for Freelancing
82.
Information on 15 freelancers showed that the cost of obtaining internet bandwidth,
smooth transaction of payments, Lack of proper infrastructure, Foreign Exchange Policy,
Electricity load shedding, Internet bandwidth (speed), Business related rules and regulations
of government, Access to Finance are founded as key problems. As the government is
working with internet bandwidth, the major concern for freelancers is the smooth transaction
of payments, that is the delay or hassles traditional banking system makes in receipt of
payment which discourages both market places and freelancers. Introduction of PayPal is the
key solution as the freelancers thought. Another important problem for the freelancers is the
proper recognition. Freelancers also are now getting industry recognition in Bangladesh.
Bangladesh Association of Software & Information Services (BASIS), has introduced Best
Freelancer Award from 2011(Now BASIS Outsourcing Award 2015). This award is
recognition for the successful freelancers in the society. But this is not enough; they should
be recognized by the Govt. so that they feel more encouraged to work for the betterment of
this sector.
Table 11: Obstacles Faced by Freelancers
Total Average
Score
Cost of obtaining internet
bandwidth
Smooth transaction of
payments
Lack of proper infrastructure
Foreign Exchange Policy7_
Electricity load shedding
Internet bandwidth (speed)
Business related rules and
regulations of government
Access to Finance
Tax Policy
Obtaining permits (if any)
Regularity of work order
Loyalty of clients
Obtaining quality certification
Communication (language)
Access to market information
Country Image or Branding
Obtaining work order
Obtaining recognition from the
clients
61
4.07
Scale Points*
2
3
4
Frequency (f)
2
0
8
60
4.00
59
58
57
57
53
3.93
3.87
3.80
3.80
3.53
1
1
0
1
1
0
1
4
3
3
2
3
2
0
4
8
4
2
5
1
4
6
7
6
6
46
39
38
35
33
33
32
32
31
29
27
3.07
2.60
2.53
2.33
2.20
2.20
2.13
2.13
2.07
1.93
1.80
2
1
3
3
4
4
6
4
1
5
7
2
8
3
4
7
6
4
7
6
8
6
5
3
4
4
2
3
2
2
2
0
1
5
2
3
3
1
2
3
2
3
2
0
1
1
1
0
1
0
0
0
0
0
1
5
5
43 | 7 1
*Scale Points: 1= No Obstacle 2= Minor Obstacle 3= Moderate Obstacle 4= Major Obstacle

5= Severe Obstacle
SWOT Analysis of the IT and ITES Services Outsourcing

SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities and Threats involved in a study or project. It involves
specifying the objectives of the study identifying the external as well as internal factors
that are in favorable and unfavorable to achieve those objectives. A SWOT analysis helps
elucidate strategic advantages. SWOT Analysis of the IT and ITES Services Outsourcing
sector shows the following Strengths, Weaknesses, Opportunities and Threats that should
be considered for future policy reforms:
Box 9: SWOT Analysis
Strengths
Weakness
Demographic Dividend
Lower cost of doing business compared to other
competing countries
Availability of Skilled workforce
Time zone advantage
Incentives taken by Government in terms of Tax and
other benefits
Bangladeshi students studying overseas in IT related
subjects
Bangladeshi skilled professionals working abroad.
Increasing number of Bangladeshi university graduates
in IT related subjects
Cost value proposition
English efficiency compared to other similar
outsourcing destination
Bangladeshi participant do well in all global IT
programming, competition, fast learner and adopter of
new technologies
Friendly Govt. Policy
Opportunities
Govt. initiatives
Low wage level
Political stability
Exploring Foreign Market
Sufficient Workforce
Growth of matching outsourcing market
Huge number of Educational Institutions offering IT
related courses
Time gap advantage
Identified as Thrust Sector by govt.
Capitalizing NRB's who work in overseas High Tech
industry
Internet and telecommunication user growing very fast
Stable growth local and regional market
Market segment of outsourcing left by India etc. as they
are moving towards higher segments
Absence of comprehensive laws and legislations

Lack of proper exposure to international markets
Image Branding
Local Infrastructure for IT and ITES
Untapped market in terms of supply perspective
Cultural difference
Inadequate Government incentives for IT industry
growth
Lack of fluency in languages other than English
like French, Spanish, Italian etc.
Limited Domestic Market
Threats
Rise of neighbor nations in this field leading to

their IT industry achieving a higher international
market share of the outsourced services
With communication being enhanced to such a
level, location is now no longer an issue. Hence
competition base is much more widened.
With the IT services moving up the value chain
ladder there are every possibility that our skill
personnel base may become redundant owing to
obsolete technology.
Other ITES destinations such as China,
Philippines and South Africa could have some
competitive advantages on the cost factor.
Slowdown of international demand
44 | 7 1
Chapter Six
Recommendations
i.
Within the framework of Digital Bangladesh, access to internet should be citizen right
as it is the main communication medium. In Bangladesh, the cost of internet is high enough
for the mass people. The number of broadband internet users is still low as the cost of internet
is high. The majority of internet users in Bangladesh have access to internet through modem.
Freelancing is not possible with limited mobile internet connections as stated by a freelancer
Mostly I face problem with bad and expensive internet connection. You know broadband
internet connection is not available to all district or Upazilla level. There are one mobile
internet available which actually very expensive and limited. Freelancing is not possible with
those limited mobile internet connections. I think, it is the only way to expand freelancing
profession to everywhere in Bangladesh is to make mobile internet unlimited and lower cost
with minimum 2mbps speed. Enterprises as well as the freelancers of this sector are also
worry about the cost of internet. Many entrepreneurs and freelancers feel that the cost of
internet is much higher than other competitor countries like India and Philippines. Although
Govt. is gradually reducing the cost of internet still it is a big issue for the end users
especially at the district level. Different districts of Bangladesh are not getting access to the
internet at the same price as Dhaka. To protect this sector Govt. should ensure the cost of
internet at reduced price and available to all districts. Govt. may take initiative to ensure high
speed internet at lesser cost at the user level. Besides, BASIS or similar concerns may
identify the real Online Professionals and recommend to the Government to provide them
with high speed internet at a lower price.
ii.
The course curriculum in Bangladesh has already been providing due importance to
ICT sector. Such curriculum should be much more practical than theoretical. For example, it
is necessary to know the history of computer, but it is more important to know how to use it,
where and how to get skills necessary to use computer to manage self employment. In this
context Govt. may take necessary steps to include more hands on ICT related topics like
success stories of the freelancers in the childrens books so that the students from the very
beginning realize the importance of IT and ITES in professional life.
iii.
To get benefit for Bangladesh from outsourcing of IT/ITES services in large scale, it
is necessary to bring upcoming young educated human resources into the coverage area of
outsourcing. To do that it is necessary to classify the services as per the skill and educational
qualification of the students. Some hands on exercise could be included at the secondary and
higher secondary syllabus with a view to providing some practical knowledge on
Outsourcing. Young age is the best time to learn and produce novel ideas. However, as
IT/ITES outsourcing is more skill oriented than other jobs, professional training is more
45 | 7 1
important than general education. However, much online training is free and course
curriculum may preclude information on such trainings. Free e-learning resources of
outsourcing and freelancing should be available for all so that the interested persons can be
get easy access to those information and motivate themselves for working in this sector.
iv.
To fasten up the economic development of the country, Bangladesh Hi-Tech Park
Authority (BHTPA) was established in 2010. As ICT has been considered as a thrust sector,
the Government has taken various initiatives to achieve the target. Among them conducive
business environment for Hi-Tech industries is mentionable. Information and Technology
(IT) Village/Software Technology Park (STP) in
divisional level would be one of the important and
priority projects which would be the milestone for the
i.
Govt.
may
consider
exempting this 4% VAT from edevelopment of IT sector as well as industrialization
commerce.
in Bangladesh. But it needs to be addressed properly
ii.
The jargons like BPO, BPM,
that the absence of socio economic infrastructure may
KPO, KPM, LPO etc. needs to be
put the initiatives of High-Tec Park questionable. No
introduced to make the nature of
IT and ITES farm would be interested to shift in such
service more visible to the foreign
a location where it would be quite difficult to afford
clients.
all these.
iii.
Govt. may take necessary
steps to include more hands on ICT
related topics like success stories of the
freelancers in the childrens books.
v.
IT sector shows a gradual growth in recent
years. But the imposition of 4% VAT on e-commerce
iv.
Initiatives taken by Govt. to
is really an obstacle to the growth of e-commerce as
attract Pay Pal in Bangladesh.
well as other IT business. Imposition of 4% value
v.
VAT on house rent for
added tax on e-commerce for the fiscal year 2015-16
IT/ITES enterprises might be rebated.
may hinder the growth of the this sector. Exemption
from this would facilitate the continuous growth of
this sector.
vi.
Different countries use different terms to mean IT/ITES outsourcing services.
Business Process Outsourcing involves the contracting of the operations and responsibilities
of a specific business process to a third-party service provider. BPO is typically categorized
into back office outsourcing, which includes internal business functions such as human
resources or finance and accounting, and front office outsourcing, which includes customerrelated services such as contact centre services. On the other hand Business Process
Management is a subset of infrastructure management, where maintaining and optimizing an
organizations equipment are to be managed. The goal of BPM is to reduce the errors which
are made by humans and focus on stakeholders. Knowledge process outsourcing refers to
outsourcing of core information-related business activities which are competitively important
or form an integral part of a company's value chain. Knowledge Process Outsourcing requires
advanced analytical and technical skills as well as a high degree of specialist expertise. Legal
Process Outsourcing which is also familiar as legal outsourcing under which the most
46 | 7 1
commonly offered services are agency work, document review, legal research and writing,
drafting of pleadings and briefs, and patent services. In this context, the jargons like Business
Process Outsourcing (BPO), Business Process Management (BPM), Knowledge Process
Outsourcing (KPO), Knowledge Process Management (KPM), Legal Process Outsourcing
(LPO) etc. needs to be introduced in addition to ITES to make the nature of service more
visible to the foreign clients. These terminologies are internationally recognized to
understand the nature of the services provided world-wide. In this connection, Govt. as well
as business associations may take initiatives for building awareness among the stakeholders.
vii.
PayPal is a worldwide online payments system through which Online money transfers
appeared as electronic alternatives to traditional paper methods like cheques and money
orders. PayPal is now available in 56 countries and allows sending and receiving funds in 6
currencies. It would make the payment system smoother and outsourcers from Bangladesh
would get rid of the problems associated with online transaction through initiatives taken by
Govt. to attract Pay Pal in Bangladesh.
viii. For the identification of the real freelancers among different Banks Officials, they
should be trained about the basic concept of freelancing, outsourcing, marketplaces, online
payment gateways ( payoneer, skrill etc ), blogging, affiliate channels ( Amazon, clickbank,
Commission Junctions etc ) to identify the real freelancers to ensure a smooth transaction.
BASIS, BCS, BCC or similar concerns including Government may organize such awareness
building programs.
ix.
Most of the IT/ITeS enterprises use rented office premises. Information on 26 IT/ITeS
firms finds that only 3 of them the owner uses own office building. Now, if on an average
each of 800 IT/ITES firms BDT 5 to 7 lac per year and provides 9% VAT on house rent, then
the government will get BDT 3.60 Crore to BDT 5.04 Crore. At national Perspective, the
value is negligible. In order to provide incentive to the IT/ITES enterprises and encourage
new entrepreneurship, VAT on house rent for IT/ITES enterprises might be rebated.
x.
Many Bangladeshi skilled professionals are working abroad. They can be encouraged
to return Bangladesh or collaborate with Bangladeshi entrepreneurs. Govt. may take
initiatives to provide proper environment for them.
xi.
Bangladeshi university graduates in IT related subjects have been increasing every
year, although the number is much less than the requirement. On the other hand the number
of HSC passed students having GPA 4 and above has been increasing. These students may be
encouraged to work for this sector. In this connection Govt. may reform education policy to
attract more students to study science as they have the potential to be the future workforce for
this sector. Almost all the Bangladeshi universities and institutes are traditional which
conduct IT related courses. Moreover at present Bangladesh does not have any advanced
47 | 7 1
Science and Technology Institute adopt the new science and technology. So, Govt. may take
initiative to establish some advanced Science and Technology Institute which would guide
the nation for adopting such technology and make more workforces for this sector.
xii.
Domain Knowledge Building is another important initiative for this sector. If the
enterprises in the industry have to move up the value chain, then the first pre requisite should
e building up domain knowledge. Only this can help them in satisfying their customers and in
turn winning their confidence. Once this is achieved, they will become repeat customers for
them.
xiii. Investing in Research and Development is very crucial for this sector to be emerged.
This may help in innovating new services and new export destinations by way of
diversification in services and diversification in destinations which could help in the growth
of the industry as well as economy as a whole. Govt. may invest more for Research and
Development in this sector and conduct studies time to time in collaboration with other
associations and research organizations for policy reforms and new policy recommendations.
xiv. Knowledge management is a technique which helps in retaining the knowledge in the
company, even when these knowledgeable persons leave the organization. This is an import
factor for this sector to survive in this competitive edge. The industry faces a high attrition
rate which deprives the company of its talents. It is a technique of assembly, preservation,
transfer and management of data and knowledge in companies. Our companies and
associations may take initiatives regarding Knowledge management.
xv.
A boost in the domestic sales can occur with more favourable government policies
and also improvement in the infrastructure which is a pre requisite for the growth of IT
industry as a whole. Friendly policies are also good for attracting FDI. In this context Govt.
should consult with all the stakeholders before recommending new or reforming existing acts,
rules and policies.
xvi. Govt. should focus on professional training as it is more important than traditional
education. So, Govt. may establish need based specialized training centers and institutes to
generate more workforces for this sector.
xvii. Highly qualified talent pool of technical graduates and freelancers are the future
workforces as well as future entrepreneurs for high end service providers which has high
demand in the foreign IT and ITES outsourcing market. Highly qualified talent pool of
technical graduates and freelancers should be constructed and trained for working with this
sector.
48 | 7 1
83.
Freelancers success stories have been discussed in this study and various other
studies. They are the pioneers for this sector. They must be attracted for becoming as an
entrepreneur. All kind of facilities should be provided for them so that they are attracted to be
a successful entrepreneur. Entrepreneurship should be encouraged for future employment
generation. Freelancers are now getting recognition (Best Freelancer Award) declared by
BASIS. They should also be recognized by the Govt. as well as other associated
organizations awards so that they feel more encouraged to work for the betterment of this
sector.
xviii. Image building and branding is a continuous process. To increase the country image
and branding of Bangladesh different types of initiatives have been taken which includes
policy initiatives, master plan, and action plan etc. As lack of promotion of the country image
or branding is one of the major challenges for this sector that many entrepreneurs feel to be
fixed out, Govt. may take more initiatives together with the business IT related organizations
for creating image and branding. The slogan of Digital Bangladesh has promoted the
country image in IT sector by a great deal. In this connection some more Branding Campaign
needed. In this case Govt. may utilize the Bangladeshs foreign mission abroad. In
consultation with the Bangladeshs foreign mission abroad BASIS may start taking such
initiatives for creating image and branding.
Summary of Recommendations
This study paper has made an insight analysis on IT and IT Enabled Services Outsourcing
sector of Bangladesh focusing the potential and difficulties faced by this sector and
accordingly made some recommendations as mentioned above which can be summarized as
follows:
i.
Govt. should ensure the cost of internet at reduced price at the user level and make
available to all districts. Besides, BASIS or similar concerns may identify the real
Online Professionals and recommend to the Government to provide them with high
speed internet at a lower price.
ii.
iii.
iv.
Necessary step needs to be taken to include more hands on ICT related topics to
attract the students from the very beginning with a view to realizing the importance of
IT and ITES in future professional life.
Free e-learning resources of outsourcing and freelancing should be available for all so
that the interested persons can get easy access to that information and motivate
themselves for working in this sector.
Priority should be given to establish Information and Technology (IT)
Village/Software Technology Park (STP) in divisional level ensuring socio economic
49 | 7 1
infrastructure which could be the milestone for the development of IT sector as well
as industrialization in Bangladesh.
v.
vi.
vii.
To facilitate the continuous growth of this sector VAT on e-commerce (4%) needs to
be exempted.
Govt. as well as business associations may take initiatives for building awareness
among the stakeholders regarding the internationally recognized jargons like Business
Process Outsourcing (BPO), Business Process Management (BPM), Knowledge
Process Outsourcing (KPO), Knowledge Process Management (KPM), Legal Process
Outsourcing (LPO) etc. needs to be introduced in addition to ITES to make the nature
of service more visible to the foreign clients.
Initiatives to be taken by Govt. to attract Pay Pal in Bangladesh for ensuring the
international online transaction smoother especially for the freelancers of Bangladesh.
viii.
BASIS, BCS, BCC or similar concerns including Government may organize

awareness building programs among different Banks Officials about the basic concept
of freelancing so that they can identify the real freelancers.
ix.
VAT on house rent for IT/ITES enterprises might be rebated as an incentive with a
view to encouraging the IT/ITES enterprises as well as new entrepreneurship.
x.
Govt. may take initiative to provide proper environment for the Bangladeshi skilled
professionals who are working abroad who should be encouraged to return
Bangladesh or to collaborate with Bangladeshi entrepreneurs.
xi.
Initiative to be taken to establish some advanced Science and Technology Institute

which would guide the nation for adopting new technology and make more
workforces for this sector.
xii.
Govt. may invest more for Research and Development in this sector and conduct
studies time to time in collaboration with other associations and research
organizations for policy reforms and new policy recommendations.
xiii.
Our companies and associations may take initiatives regarding knowledge

management which will help retaining the knowledge in the company, even when
these knowledgeable persons leave the organization.
50 | 7 1
xiv.
Govt. should consult with all the stakeholders before recommending new or reforming
existing acts, rules and policies.
xv.
Govt. should focus on professional training as it is more important than traditional

education. So, Govt. may establish need based specialized training centers and
institutes to generate more workforces for this sector.
xvi.
Highly qualified talent pool of technical graduates and freelancers should be

constructed and trained for working with this sector.
xvii.
Freelancers as well as entrepreneurs should also be recognized by the Govt. as well as

by the other associated organizations to make them feel more encouraged to work for
the betterment of this sector.
xviii.
Govt. may utilize the Bangladeshs foreign mission abroad regarding Image building
and branding. In consultation with the Bangladeshs foreign mission abroad BASIS
may start taking such initiatives for creating image and branding.
xix.
Above all, Government needs to prioritize the impediments faced by this sector and
undertake concrete follow up actions.
Concluding Remarks
As an emerging source for IT and ITES outsourcing destination and as a developing market,
Bangladesh has a fair set of weaknesses. Most of them come from lack of skills, know-how
and adequate investment in the country. Keeping these weaknesses in mind Government has
taken different plans, strategies, and projects to facilitate IT sectors. Government's "thrust
sector" initiatives for ICT include exemption of income tax, value-added tax, and customs
duty for ICT industry establishment of national ICT policy, organizing the ICT National
Taskforce (the chair is the Prime Minister) establishment of ICT incubation center, long-term
equity fund and short term working capital financing, enactment & Copyright Law etc.
Several pilot initiatives are being formulated and implemented under intense supervision o
respective Government agencies. Special Hi-Tech and Software Technology Parks are being
built by the government to facilitate all the infrastructural supports needed by outsourcing
companies. The future of the IT and ITES outsourcing industry is very bright provided it
overcomes the challenges, weaknesses and threats cited above. To make all these plans,
policies and initiatives to be a successful one, government needs a collaborative action plan
to prioritize the impediments faced by this sector as identified in this study and various others
study and undertake concrete follow up actions.
51 | 7 1
Annex 1
Confidential & Restricted
ENT. No.
Government of The Peoples Republic of Bangladesh

1st 12 Storied Govt Office Building

Segunbagicha, Dhaka-1000.
www.btc.gov.bd
Questionnaire for the study on IT & IT Enabled Services Outsourcing in Bangladesh

The purpose of this questionnaire is to gather information and opinions about the problems and
prospects of IT & IT Enabled Services (ITES) Outsourcing in Bangladesh. Bangladesh Tariff
Commission emphasizes that information gathered here will help advise government in developing
new policies and initiatives that enhance employment, trade in services and economic growth. The
information obtained here will be kept confidential. Neither your name nor the name of your
business enterprise will be used in any report to be prepared based on this study.
Name of the enterprise _______________________________________________________________
Address ______________________________________Website______________________________
Name of the respondent __________________________________________________________
Designation __________________________ Contact No __________________________________
Name of the Interviewer_______________________________ Contact No._________________
Bangladesh Tariff Commission is a statutory public advisory body that recommends government on
the protection of domestic industry, promotes fair trade and negotiation under bilateral, multilateral
and regional trade agreements.
To identify the potential IT & IT Enabled outsourcing services in Bangladesh
To identify the export opportunities for selected IT & IT Enabled outsourcing services of
Bangladesh
To assess the potential of IT & IT Enabled outsourcing Services as a source of employment
generation
To diagnose the constraints working against exploring the opportunities of IT & IT Enabled
Services in Bangladesh.
To prepare a policy recommendation for the government to remove the obstacles identified in
order to promote IT & IT Enabled Services of Bangladesh at home and abroad
Expected Outcome
Potential sub sectors of IT & ITES will be identified which will help negotiate at bilateral,
multilateral and regional level. The publication of this study, arrangement of seminar and
workshops will generate public awareness. The study will explore a suitable source of self
employment. Above all the study will help expand the export market as well as reduce trade deficit
of Bangladesh with other countries.
52 | 7 1
A: General Information
A1. Key Service delivered (In terms of turnover)
A2. Other Service(s) delivered
Web & Mobile Development

IT & Networking
Data Science & Analytics
Engineering & Architecture
Design & Creative
Writing
Translation
Legal
Admin Support
Customer Service
Sales & Marketing
Accounting & Consulting
Others

IT & Networking
Design & Creative
Writing
Translation
Legal
Admin Support
Customer Service
Sales & Marketing
Others (please specify...............................).
A3. Number(s) of branch office/ work station in

Bangladesh-
A4. Status of your firmSole proprietorship

Partnership
Private Limited
Public Limited
Others (Please specify................................)
A5. Total Persons Engaged (TPE) at the beginning of the firm
a. IT
b. ITES
A6. Was this establishment formally registered at the beginning of the operation?
Yes
No
A7. Year of establishment and registration:

Year
Established
Registered
Not Yet Registered
53 | 7 1
A8. Please mention the license/permits required before going into operation of your business and
time spent for obtaining such permits/licenses
Name of License/permits
Purpose
Authority
Time required
(days)
1
2
3
4
5
6
B: Personal Information
B1. Age of Entrepreneur:
Below 30
30-39
40-49
50-59
above 59
B2. Gender of Entrepreneur:
Male
Female
Others
B3. Educational Qualification of Entrepreneur:
Below Secondary
Secondary
Higher Secondary
Bachelor
Masters
Above Masters
B4. Years of working experience of Entrepreneur:
Below 5
5-9
10-14
15-19
20-24
Above 24
B5. Age of Top Manager (CEO/MD)
Below 30
30-39
40-49
50-59
above 59
B6. Gender of Top Manager/ (CEO/MD)
Male
Female
Others
54 | 7 1
B7. Educational Qualification of Top Manager (CEO/MD)
Below Secondary
Secondary
Higher Secondary
Bachelor
Masters
Above Masters
B8. Years of working experience of the CEO/MD
Below 5
5-9
10-14
15-19
20-24
Above 24
B9. What was/were the major reason(s) for selecting this sector for investment?
Prior experience of the entrepreneur(s)
Low risk
Passion
High rate of return
Others (please specify)____________
Others (please specify)_____________
C: Infrastructure
C1. Status of your office Building:

Own
Rented
C2. Source(s) of power supply for your enterprisePercent
National Grid
Own generator
Shared generator
Other Source (specify)............
Total
100%
C3. Over the last 5 years has your enterprise applied for electricity connection?
Yes
No
C3a. If Yes, mention the number of days it took to obtain this connection from the day of the
application to the day the service was received:
Day(s)
Applied but havent get yet
Application denied
Got the connection successfully
55 | 7 1
C4. Please provide the means of internet connection used in your establishment and approximated
share (percentage) of each means in total usage of internet
Percent
Broad Band
Modem
Others (please specify............................)
C5. In obtaining an electrical or internet connection, did you face any problem?
Electrical Connection
Yes
No
Internet Connections
Yes
No
C5a. If Yes, please mention the problem.

Electrical Connection
Internet Connections
D. Obstacles
D1. Degree of an obstacle to the current operations of this establishment1= No Obstacle

Obstacle
2= Minor Obstacle
3= Moderate Obstacle
4= Major Obstacle
5= Severe
Cost of obtaining internet bandwidth
Obtaining recognition from the clients
Smooth transaction of payments
Loyalty of staffs
Enforcing contract with the client
Shortage of Skilled Manpower
Lack of capital
Access to Finance
Business related rules and regulations of government
56 | 7 1
Tax Policy
Country Image or Branding.........................................)
Others (please specify.................................................)
D2. Regarding the obstacles pointed above, please mention three obstacles that hinder your business
mostly.
1.
2.
3.
E. Finance
E1. Please mention the amount of initial investment to your enterprise.

Amount of Investment
in BDT
Interest Rate
(if applicable)
Self Financing
Banks
Non Bank Financial Institutions
NGOs
Friends & Relatives
Other sources (please specify)
57 | 7 1
E2. Have you expanded your enterprise?

Yes
No
E2a. If Yes, Please mention the nature of expansion.
E2b. If No, Please mention the reason(s) why it has not yet been possible for you to expand
your enterprise.
E2c. What was/were the major reason(s) for expanding this sector for investment?
Low risk
High rate of return
Prior experience of the entrepreneur(s)
Others (please specify)
E2d. Please mention the amount of investment for the expansion till date
Amount of Investment
in BDT
Interest Rate
(if applicable)
Self Financing
Banks
Non Bank Financial Institutions
NGOs
Friends & Relatives
Other sources (please specify)
58 | 7 1
E3. Please provide following financial information about your enterprise. (In lac BDT)
2009-10
A
Investment
Net book value of fixed

assets.
Working capital
2010-11
2011-12
2012-13
2013-14
F. Human Resources
F1. Please provide following employment information of your enterprise.

Number
Full
Contractual
time
Managerial Officers
(CEO, GM, and others
administrative officers/associates)
Outsourcing Related l Experts
(Engineer, Programmer etc)
Male
Female
Other
Male
Female
Other
Male
Other support staffs
Female
Other
F2. Please mention the range of monthly salaries and allowances paid to Outsourcing Related
Experts offered by your enterprise.
Fringe benefits.
Full time Employees
Range of Salaries and allowances in BDT
Basic Salary
____________ to ______________
House Rent
____________ to ______________
Lunch
____________ to ______________
Overtime
____________ to ______________
Medical
____________ to ______________
Provident/pension fund
Yes
No
Transportation
____________ to ______________
Lunch Allowance
____________ to ______________
Others (specify....................)
____________ to ______________
59 | 7 1
F3. Please mention the minimum requirement for an outsourcing related expert:
Educational Qualification
Experience
Others (specify)
Web & Mobile

Development
IT & Networking
Data Science &
Analytics
Engineering &
Architecture
Design & Creative
Writing
Translation
Legal
Admin Support
Customer Service
Sales & Marketing
Accounting &
Consulting
Others
F4. Please mention the minimum professional training(s) that outsourcing related experts need.
Name of Training
IT & Networking
Design & Creative
Writing
Translation
Legal
Admin Support
Customer Service
Sales & Marketing
Others
60 | 7 1
F5. Does your enterprise arrange training program for employees?

Yes
No
F5a. If Yes, mention the number of training program(s) arranged/attended by your enterprise in the
last 5 (five) years;
Arranged
Attended
By the enterprise itself

By Government
Jointly
Others
F5b. How many training program(s) was/were conducted by local or foreign trainers in the last 5
(five) years?
Number
Local Trainers
Foreign Trainers
Jointly by Local and Foreign Trainers
G. Clients
G1. Number of work orders received in last 5 years:

Number
Bidding from online circulars/tenders
Work Orders from trusted Clients
Other sources (please specify.................................)
G2. Do you have any agreements/contracts with any trusted clients to work on regular basis?
Yes
No
G2a. If Yes, mention the number of contracts you have with different Clients in last 5 years:
Number of Contracts
Local Clients
Foreign Clients
61 | 7 1
G2b. In case of foreign contracts, provide the name of country and number of such contracts (last 5
years):
Country
Number of Contracts
G3.Hoe important the following factors are to ensure that the work orders are not fake?
1= Not Important 2= Slightly Important 3= Fairly Important 4= Important 5= Very Important
The previous work experience with the
client.
The goodwill of the client
Personal connection
Advance payment
Others (please specify

...............................................)

...............................................)
G4. How do you receive the payments from your foreign clients?
G5. In the last 5 years, was your enterprise involved any dispute with foreign clients
Yes
No
G5a. If Yes, how the dispute was resolved?
62 | 7 1
H. Performance
H1. Please mention the information regarding the service delivery of your enterprise.
(In lac BDT)
2009-10
1
2010-11
2011-12
2012-13
2013-14
Annual Gross Turnover

1.1
Domestic
1.2
Foreign
Export of
Outsourcing Services
Annual Cost of Services

2.1 Materials
Local
Imported
2.2 Salaries & allowances paid
to administrative officials
2.3 Salaries & allowances paid
to outsourcing related
experts
2.4 Office rent
2.5 Electricity bills
2.6 Internet charges
2.7 Other operating cost
Taxes
Payments made for

subcontract (if any)
No. of Outsourcing related

experts
Capacity Utilization
63 | 7 1
H2. Major Export destination(s) of outsourcing services your enterprise:

(Lac BDT)
Export in 2009-10
Export in 2013-14
Country
H3.Outsourcing services exported by your enterprise:

Lac BDT
2013-14
2009-10
Services
H4. In the last 5 (five) years, had your enterprise experience any lock out or shut down?
Number (If Yes)
Lockout
Yes
No
Shut Down
Yes
No
H4a. If Yes, please mention the reason:
64 | 7 1
I. Role of the Government
(Extra pages can be used if needed)

I.1. Incentives you are enjoying from the government:
I.2. Other facilities you recommend to be provided by the government:

I.3 Initiatives to be taken by the government for overall development of the sector:
I.4. Country specific request(s) (if any) that the government can put in negotiation agenda
65 | 7 1
Annex 2
Confidential & Restricted
Expert. No.
Government of The Peoples Republic of Bangladesh

1st 12 Storied Govt Office Building

Segunbagicha, Dhaka-1000.
www.btc.gov.bd
Questionnaire for the study on IT & IT Enabled Services Outsourcing in Bangladesh

Outsourcing Related Experts
The purpose of this questionnaire is to gather information and opinions about the problems and
prospects of IT & IT Enabled Services (ITES) Outsourcing in Bangladesh. Bangladesh Tariff
Commission emphasizes that information gathered here will help advise government in developing
new policies and initiatives that enhance employment, trade in services and economic growth. The
information obtained here will be kept confidential. Neither your name nor the name of your
business will be used in any report to be prepared based on this study.
Name of the Respondent______________________________________________________________
Address ___________________________________________________________________________
Occupation ____________ __________________________________Email__________________
Designation __________________________ Contact No __________________________________
Name of the Interviewer_______________________________ Contact No.__________________
Bangladesh Tariff Commission is a statutory public advisory body that recommends government on
the protection of domestic industry, promotes fair trade and negotiation under bilateral, multilateral
and regional trade agreements.
To identify the potential IT & IT Enabled outsourcing services in Bangladesh
To identify the export opportunities for selected IT & IT Enabled outsourcing services of
Bangladesh
To assess the potential of IT & IT Enabled outsourcing Services as a source of employment
generation
To diagnose the constraints working against exploring the opportunities of IT & IT Enabled
Services in Bangladesh.
To prepare a policy recommendation for the government to remove the obstacles identified in
order to promote IT & IT Enabled Services of Bangladesh at home and abroad
Expected Outcome
Potential sub sectors of IT & ITES will be identified which will help negotiate at bilateral,
multilateral and regional level. The publication of this study, arrangement of seminar and
workshops will generate public awareness. The study will explore a suitable source of self
employment. Above all the study will help expand the export market as well as reduce trade deficit
of Bangladesh with other countries.
66 | 7 1
[Please double click on the checkbox, then select checked and click OK wherever applicable]
1. Area of Expertise:
IT & Networking
Design & Creative
Writing
Translation
Legal
Admin Support
Customer Service
Sales & Marketing
2. Age:
Below 30
30-39
40-49
50-59
above 59
3. Gender:
Male
Female
Others
4. Years of working experience:

Below 5
5-9
10-14
15-19
20-24
Above 24
5. Educational Qualification:
Below Secondary
Secondary
Higher Secondary
Bachelor
Masters
Above Masters
6. Advantage of Employment over Free Lancing:

1= Strongly Disagree 2= Disagree 3=Neutral 4= Agree 5= Strongly Agree
Employment ensures professional identity
Employment assures regularity of works
Payment in Free Lancing is uncertain
Free lancing is too competitive to ensure work on

regular basis
Free Lancers are susceptible to Fake work orders

...............................................)
67 | 7 1

...............................................)
7. Advantage of Free Lancing over Employment

1= Strongly Disagree 2= Disagree 3=Neutral 4= Agree 5= Strongly Agree
Earning is not limited to certain amount
Independence in working
Rate of return for each assignment is higher

...............................................)

...............................................)
8. What was/were the major reason(s) for selecting this sector as a profession?
Relevance with Educational
Background
Passion
Failure to get jobs in other

sector
Independence in Working
High rate of return
Others (please specify)____________
It's an Intellectual Sector
Others (please specify)_____________
9. Degree of obstacle in your business:

1= No Obstacle 2= Minor Obstacle
Obstacle
3= Moderate Obstacle
4= Major Obstacle
5= Severe
Cost of obtaining internet bandwidth
Obtaining recognition from the clients
Smooth transaction of payments
Loyalty of clients
68 | 7 1
Regularity of work order
Access to Finance
Business related rules and regulations of government
Tax Policy
Country Image or Branding.........................................)
10. Regarding the obstacles pointed above, please mention three obstacles that mostly hinder your
business.
1.
2.
3.
11. If Yes, mention the number of training program(s) attended by you in the last 5 (five) years;
Local
Foreign
By the Employer
By Government
Jointly by Employer and the Government
Others
69 | 7 1
12. Annual income from IT/ITES Outsourcing (If actual data is not recorded, use the best
approximation)
Services
2009-10
2010-11
2011-12
2012-13
2013-14
13. Major export destination (s) of your services

Services
Name of countries
14. Do you face any difficulty receiving the payments from your foreign clients?
15. Facilities you recommend to be provided by the government:

16. Initiatives to be taken by the government for overall development of the sector:
17. Country specific request(s) (if any) that the government can put in negotiation agenda:
70 | 7 1
References
Deloitte. 2015. Digital Inclusion and Mobile Sector Taxation of Bangladesh. Report prepared
for Groupe Speciale Mobile Association (GSMA), GSMA: Hongkong
Quader , Md Mahfuzul Why Bangladesh is right choice for IT outsourcing; Financial
Express; 31 October 2013
Miller, Ben and Robert D. Atkinson. 2014. Digital Drag: Ranking 125 Nations by Taxes and
Tariffs on ICT Goods and Services. The Information Technology and Innovation Foundation
(ITIF): Washington DC.
Bangladesh Beckons-An Emerging Destination For IT/ITeS Outsourcing; 2012; available
from http://www.intracen.org/news/New-report-Bangladesh-beckons---an-emergingdestination-for-ITITeS-outsourcing/ (Accessed: 2015)
Forecast Analysis: IT Outsourcing, Worldwide, 1Q14 Update available from
https://www.gartner.com/doc/2707918/forecast-analysis-it-outsourcing-worldwide
Gartner IT Glossary available from http://www.gartner.com/it-glossary/itoutsourcing(Accessed: 2015)
ICT Sector Study Bangladesh: Bridging the Gap between Dutch and Bangladeshi ICT
Sector available from
http://www.basis.org.bd/resource/ICT%20Sector%20Study%20Bangladesh.pdf (Accessed:
2015)
Madhani, Pankaj M. Global Hub: IT and ITES Outsourcing, available from
http://www.researchgate.net/publication/228234326_Global_Hub_IT_and_ITES_Outsourcin
g (Accessed: 2015)
Marshall , Samantha .Outsourcing moves to Bangladesh ; December 16, 2007 available
from http://www.crainsnewyork.com/article/20071216/SUB/312160001/outsourcing-movesto-bangladesh (Accessed: 2015)
MacDonell, K. 2010, CoolData Blog, Survey and Missing Data, viewed at
https://cooldata.wordpress.com/2010/02/01/surveys-and-missing-data/ (Accessed: 2015)
Why Bangladesh , Business Promotion Council available from
http://bpc.org.bd/ibpc_whybd.php (Accessed: 2015)
World Bank. 2012. Knowledge Economy Index (KEI) 2012 Rankings. KAM:
www.worldbank.org/kam. World Bank: Washington DC (Accessed: 2015)
World Bank, 2013. Enterprise Survey, Questionnaire, Service Module, viewed at
http://www.enterprisesurveys.org/~/media/GIAWB/EnterpriseSurveys/Documents/Methodol
ogy/ES_Services_Questionnaire.pdf (Accessed: 2015)
71 | 7 1

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ITES in Bangladesh

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Cover Design:

Md. Akram Hossain

Problems and Prospects of IT and IT Enabled Services Outsourcing

Sheikh Abdul Mannan

In this context Bangladesh Tariff Commission conducted a comprehensive study on

Md. Mamu-Ur-Rashid Askari

Problems and Prospects of IT and IT Enabled Services Outsourcing

To evaluate present status and trends

To analysis related Acts, Rules and Policies

To explore potentials and export opportunities

To assess possibility of employment generation

To identify constraints and opportunities

To prepare policy recommendations

Limitation of the Study

Pankaj M.Madhani, Global Hub: IT and ITES Outsourcing,

Global Trend of IT outsourcing industry

Different types of outsourcing services have been provided worldwide in IT and IT

Multimedia products development

Digital Brochure & Digital Magazine

Government has demonstrated and expressed a determination to promote IT services industry

Samantha Marshall ,Outsourcing moves to Bangladesh ;December 16, 2007 available at

Bangladesh Beckons - An Emerging Destination For IT/ITeS Outsourcing( 2012); at:

Regulatory Bodies in Bangladesh

improving. Ministry of Local Government and Rural Development, Bangladesh Computer

Box 1: Digital Bangladesh Policies and Regulatory Framework

ICT Policy 2009

Box 2: Summary of ICT Act, 2006

National ICT Policy 2009

Ensure secure source of finance for potential software and IT companies;

Expansion of infrastructure facilities for development of ICT sector for

Increasing public sector allocation for the advancement of ICT in Bangladesh.

Perspective Plan 2010-2021

SIM Card Provider

VAT- 4.5% of 30% of total

Online product &

4.0 of 26.67% of total receipt

Rent of Place &

Service provided Only through

Source: National Board of Revenue, June 2015

Following box shows a snapshot of some of the popular freelancing marketplaces.

Available Project Types

Selz Payments Solutions

Present Status and Trend of IT& ITES Industry in Bangladesh

Source: BASIS Survey

Table2: Total Export of IT/ITES Services

Source: Bangladesh Bank

(Values in Million US$)

Source: Bangladesh Bank

Performance of IT Enabled Services Outsourcing in Bangladesh

Figure 3: Recent Trends in Export of Computer Related Services in Bangladesh

Export-Computer Data Processing

Export-Computer Consultancy Services

Source: Bangladesh Bank

Source: Statistics Division Bangladesh Bank

United Arab Emirates

United Kingdom (UK)

Source: Statistics Division Bangladesh Bank

Table6: Country Wise Payments Made by Bangladesh for Computer Software

2009 - 2010 2010 - 2011

2012 - 2013 2013 - 2014

Source: Statistics Division Bangladesh Bank

Import of Computer Software

Import of Computer Consultancy Services

Computer Data Processing Services